Securities Division issues Cease and Desist order after Ponzi-style scheme defrauds Missourians
Secretary of State Jay Ashcroft’s Securities Division issued a final cease and desist order against Monarch Capital Investment Fund, LLC, and top executive Timothy Patrick Peabody after several investors in Missouri were defrauded.
Missouri Commissioner of Securities David Minnick found that between April 2015 and October 2016, Peabody, “engaged in fraudulent or deceitful acts and practices through his company Monarch Capital Investment Fund.”
Minnick concluded that Peabody and Monarch Capital employed a third party, Retire Happy, LLC, for compensation, to raise funds through the sale of unregistered, non-exempt promissory notes.
The nationwide fundraising effort successfully raised more than $7 million and targeted at least four Missouri investors who purchased notes totaling $210,500, according to a release from the Secretary of State's Office.
Investors were provided a brochure and told their investments were to fund real estate investment ventures in Florida, but only $100,000 of the more than $7 million raised was used for that purpose.
With the remaining funds, respondents engaged in a Ponzi-style scheme, circulating new investors’ funds back to other investors in the form of interest payments.
Ultimately a majority of the funds were used for Peabody’s personal benefit.
Peabody and Monarch were ordered to pay restitution, civil penalties and investigation costs totaling just over $760,000.
“Make sure you understand the risks and know who you are dealing with before you turn over any of your hard-earned money,” Minnick said. “Find out if your money is actually being used in the way you were told it would be.”
Ashcroft continues to urge area investors to call the toll-free investor protection hotline at 800-721-7996 or go online to www.missouriprotectsinvestors.com for more information or to file a complaint.