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SEC Charges Trio With Defrauding Investors In Bogus Scheme

Eliane Chavagnon

22 October 2012

The Securities and Exchange Commission has charged a money manager and two of his chief marketers for defrauding investors in a bogus company between February 2010 and February 2011.

The SEC said the fake firm "bore a similar name to what was formerly one of Germany's largest banks" and alleges that Geoffrey Lunn operated the $5.77 million investment scam with assistance from Darlene Bishop and Vincent Curry. Lunn portrayed himself as the vice president of Dresdner Financial, a firm whose executives he claimed had connections to Dresdner Bank and which was purportedly planning to purchase several other banks to expand its operations.

The trio solicited investors throughout the US and in several foreign countries for their ".44 Magnum Leveraged Financing Program," which they promised could turn an investment of just $44,000 into $2 million within 10 to 12 banking days. "Lunn withdrew the money in cash and Western Union transfers, paid hundreds of thousands of dollars to Bishop and Curry, and gave nearly a million dollars to three Las Vegas call girls," the SEC said in a statement. 

According to the SEC's complaint - filed in federal court in Denver, CO - Lunn admitted in sworn testimony during the SEC's investigation that, "it was a con," admitting that he did not lease any bank instruments, obtain any insurance wraps, monetize any bank instruments, or place any money into trading platforms as represented to investors. Nor did he return the money to investors.

When the trio were unable to repay investors after the 10 to 12 days, they perpetuated the scheme by "repeatedly postponing the payout dates and claiming the delays were due to holds placed by banks or the government," the regulator said.