LOS ANGELES – The previous CEO of a Valencia-centered economic companies enterprise was sentenced now to 33 months in federal jail for aiding to run a Ponzi plan that defrauded dozens of buyers – together with his very own purchasers – out of in excess of $2.3 million with false promises of earning up to 20{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} month to month returns on their dollars.
Scott Allensworth, 68, of Santa Clarita, was sentenced by United States District Choose John A. Kronstadt, who also purchased him to fork out $2,321,429 in restitution.
In July 2021, Allensworth pleaded guilty to just one count of wire fraud.
Allensworth was the proprietor and CEO of Capital Growth Group Associates (CGGA), a business that supplied economical products and services to shoppers, including tax advice and return planning expert services, accounting expert services, retirement organizing and expense advisory services.
From November 2015 to March 2017, Allensworth schemed to defraud investors alongside with David Hunt Weddle, 66, who managed a non-public expenditure fund via JustInfo LLC, a company Weddle managed and operated out of his Somerset, Kentucky house.
Allensworth and Weddle solicited cash – to be invested with CGGA and Weddle – from sufferer-buyers, who integrated Allensworth’s customers. These purchasers trustworthy him primarily based on their prior romantic relationship with him, and advisable Allensworth to their close friends and loved ones customers, who also grew to become victims of the scheme.
To lure sufferer-traders, Allensworth and Weddle promised them that their revenue would go into a brokerage account, and they would soon recognize profits for the reason that Weddle utilized a specific trading tactic that would restrict their losses and produce investment decision month to month returns of in between 5{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} and 20{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b}.
Rather of investing the cash as promised, Allensworth and Weddle utilized element of the funds to pay out for their personalized expenses, together with – for Allensworth – credit score card payments. In Ponzi model, they also used target-investor funds to repay and fund withdrawals asked for by other victim-traders, falsely representing that the funds comprising these withdrawals arose from their investment decision gains.
Allensworth and Weddle unsuccessful to tell victim-traders that neither of them was registered or licensed as a commodity investing advisor and that the United States Securities and Trade Commission experienced subpoenaed each of them in December 2016.
Weddle also fabricated many fake account statements which they sent to target-traders that purported to present the investments ended up steadily rising in worth based on Weddle’s buying and selling action, when Allensworth and Weddle experienced misappropriated the resources.
As a final result of the fraudulent scheme, Allensworth and Weddle caused much more than 50 victims to experience full losses of about $2,320,000.
Weddle pleaded guilty in March 2021 to one particular count of wire fraud. He is serving a 41-thirty day period jail sentence for that criminal offense.
The SEC introduced civil charges from Allensworth, Weddle and JustInfo LLC in Oct 2017. That case settled the following year with the defendants agreeing to spend more than $300,000 in civil penalties.
The FBI investigated this subject.
Assistant United States Attorney Steven M. Arkow of the Important Frauds Portion prosecuted this case.
