SEC alleges 3 Dallas-Fort Worth residents operated $91M Ponzi scheme

The Securities and Exchange Commission has leveled accusations against three residents of the Dallas-Fort Worth area, alleging their involvement in a Ponzi scheme that defrauded investors of a staggering $91 million. The individuals in question, named Kenneth Alexander II, Robert D. Welsh, and Caedrynn E. Conner, purportedly collected funds from over 200 investors by funneling the money into a trust overseen by Alexander, which was presented as an international bond trading enterprise. These actions have prompted the SEC to assert that the trio violated federal securities laws, specifically the antifraud and registration provisions.

Sam Waldon, Acting Director of the SEC’s Division of Enforcement, expressed dismay at the situation, stating, “As we allege, the defendants conducted a large-scale Ponzi scheme that caused devastating losses to investor victims, while Alexander and Conner misappropriated millions of dollars of investor funds.” He emphasized the SEC’s unwavering dedication to holding accountable those who engage in defrauding investors.

The SEC’s investigation revealed that Alexander and Welsh managed a trust named Vanguard Holdings Group Irrevocable Trust, offering investors twelve promised monthly payments ranging from 3% to 6%, with a pledge to return their principal investment within fourteen months. Conner’s alleged involvement included transferring over $46 million of investor funds to the trust through an investment program he administered and controlled via Benchmark Capital Holdings Irrevocable Trust. The trio allegedly enticed investors with the purchase of a “pay order” to safeguard their investments from losses. Regrettably, the SEC disclosed that this “pay order” was deceptive, as the trust lacked a substantive revenue source, and all monthly returns constituted Ponzi payments.

Furthermore, Alexander and Conner purportedly diverted funds for personal use, with Conner allegedly utilizing a portion of the embezzled money to acquire a luxurious $5 million residence. The individuals involved have been accused of infringing upon federal securities laws, particularly the antifraud and registration stipulations.

Moving forward, prosecutors are seeking the restitution of the investors’ funds with incurred interest, in addition to any civil penalties that may be imposed on the group. The SEC’s ongoing efforts to combat financial fraud underscore the significance of upholding integrity and investment transparency in the marketplace, safeguarding investors from falling prey to unscrupulous schemes that jeopardize their financial well-being.