SEC Action Against Prime Bank Scam Investment Fraud Scheme Pertaining to TLC Investments Offering High-Yield Instruments
Did The Scammers Get Scammed?
10/00 - The SEC issued a temporary restraining order halting an ongoing multimillion dollar securities fraud by Ernest F. Cossey and Gary W. Williams, entities controlled by them, and Thomas G. Cloud and his company, who were using the Internet to sell the fraudulent securities.
They allege that since 1998, TLC Investments & Trade Co., TLC America, Inc. dba Brea Development Company, TLC Brokerage, Inc., dba TLC Marketing, TLC Development, Inc, and TLC Real Properties RLLP-1 have raised at least $151 million from more than 1,800 investors, mostly senior citizens, purportedly for the purpose of investing in distressed real estate.
Investors were promised a safe, liquid investment that would pay guaranteed returns of 8 to 15%.
In fact, Cossey, Williams and the TLC Entities were operating an undisclosed Ponzi scheme using client funds to make interest payments.
In addition, Cossey and Williams have misused at least $28.3 million in investor funds to pay other investors, invest in a prime bank scheme, buy racehorses and wire funds overseas.
The Receiver's initial status report indicates what remains is only approximately $2.5 million in cash and real estate purchased and developed at a cost of approximately $61 million.
Cloud and his company, Cloud & Associates Consulting, Inc., misrepresented, among other things, that they had received no commissions when, in fact, they received at least $1 million.
The SEC is seeking a final judgment enjoining them from future violations, order them to disgorge all ill-gotten gains, and assess civil penalties against them.
08/01 - Williams is required to pay $248,145 in disgorgement and Cossey is required to pay $10,690,697 in disgorgement, $271,921.53 in prejudgment interest and $110,000 in civil penalties (totaling $11,072,618.53).