SEC ALLEGES A FRAUD SCHEME AGAINST SENIORS

Criminals, like other predators, will often target those they consider to be weak. The elderly and the poorly educated seem to be favorite targets of those with the twin gifts of persuasiveness and complete lack of compassion and pity for fellow human souls. In the case below the SEC has alleged that a Connecticut man used misrepresentations to illicit funds from elderly investors. The following case is an excerpt from the SEC website:

“The Securities and Exchange Commission announced that, on June 20, 2011, it filed an emergency enforcement action in federal district court in Connecticut and obtained a temporary restraining order, asset freeze, and other emergency relief against Florin S. Ilovici, of Avon, Connecticut, in connection with a scheme to defraud investors. The Commission’s Complaint alleges that, since at least 2007, Ilovici made material misrepresentations in raising over $1 million in investment funds from at least two elderly Connecticut women who lived alone, had little or no family, and had health problems. Instead of investing these funds on their behalf as he promised, Ilovici transferred the investor funds to his personal bank and brokerage accounts where he either lost the funds in risky securities or foreign currency exchange trading or spent the funds on personal expenses, including mortgage and credit card payments, travel, and home improvements, all without the knowledge or authorization of his investors.
The Commission’s complaint alleges that Ilovici’s conduct violates Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint also names Ilovici’s wife, Diana Ilovici, as a Relief Defendant. The Honorable Warren W. Eginton issued a temporary restraining order, prohibiting Ilovici from directly or indirectly continuing to violate the foregoing statutory provisions, and an order freezing Ilovici’s assets, as well as certain assets of his wife that are believed to be derived from the proceeds of Ilovici’s fraudulent scheme. The Court’s order further provides that Ilovici is prohibited from soliciting or accepting additional investor funds and from altering or destroying any relevant documents, and the order also requires Ilovici to provide an accounting of his assets and his use of investor funds. The Court’s order also permits the Commission to conduct expedited discovery and provides other relief. In its action, the Commission seeks the entry of a preliminary injunction against Ilovici upon the expiration of the temporary restraining order, the entry of a permanent injunction against Ilovici, disgorgement of ill-gotten gains by both Ilovici and his wife plus pre-judgment interest thereon, and the imposition of a civil monetary penalty against Ilovici. A hearing on the Commission’s request for a preliminary injunction has been scheduled for July 8, 2011.
The Commission acknowledges the assistance of the United States Postal Inspection Service. The Commission’s investigation is ongoing.”