FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
Thursday, February 26, 2015
California Financier Charged in Alleged Ponzi Scheme
Former CEO and Corporate Counsel of Financial Services Marketing Company Previously Pleaded Guilty
A California man and purported billionaire financier was taken into federal custody today for his role in an alleged Ponzi scheme in which investors lost $2.5 million, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Inspector in Charge Gary Barksdale of the U.S. Postal Inspection Service’s Criminal Investigations Group.
Kenneth Brewington, 50, of Corona, California, was indicted on Feb. 24, 2015, by a federal grand jury in the District of Colorado for conspiracy to commit wire and mail fraud, mail fraud and six counts of wire fraud.
According to allegations in the indictment, from September 2009 until 2011, Brewington and his co-conspirators sold promissory notes to investors through a financial services marketing company based in Denver called Compass Financial Solutions (CFS). The indictment alleges that Brewington and his co-conspirators falsely represented to investors that Brewington held millions of Euros in overseas bank accounts, and that the proceeds raised from investors would be used to obtain the release of his overseas funds. To conceal the scheme, Brewington and his co-conspirators allegedly had investors wire their funds to an attorney trust account. The funds from that account, however, were then allegedly sent to Brewington and his co-conspirators. Brewington and his co-conspirators allegedly used the investors’ money for their own personal benefit.
The former corporate counsel for CFS, William E. Dawn, 77, of Denver, and the former CEO of CFS, Brian G. Elrod, 58, of Lakewood, Colorado, previously pleaded guilty for their roles in the scheme. Sentencing hearings are scheduled for May 29, 2015, and May 22, 2015, respectively.
The charges contained in an indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
The case was investigated by the U.S. Postal Inspection Service, and is being prosecuted by Trial Attorneys Henry P. Van Dyck and Jennifer G. Ballantyne of the Criminal Division’s Fraud Section. The Securities and Exchange Commission has provided substantial assistance in this matter.