SEC Charges Florida and Canadian Residents Over $300 Million Gold Mining Investment Ponzi Scheme
The U.S. Securities and Exchange Commission charged four Canadian citizens and two Florida residents for an alleged Ponzi scheme which defrauded more than 3,000 investors across the U.S. and Canada of approximately $300 million, according to an SEC press release. The SEC has filed a complaint alleging that Milowe Allen Brost and Gary Allen Sorenson of Calgary, Alberta, devised the scheme in which the defendants claimed to be an independent financial education which had discovered investment opportunities in certain companies engaged in gold mining. The defendants held seminars in which they promised investors they could earn 18 to 36 percent annual returns. Brost, Sorenson and the other defendants are alleged to have concealed the fact that the companies, Syndicated Gold Depository (SGD) and Merendon Mining Corp., Ltd., were actually shell companies which the defendants owned or controlled. The defendants claimed that Merendon was a successful gold mining and refining company.
Brost and Sorenson allegedly used various aliases, shell corporations and trust agreements to conceal their ownership of SGD. They would transmit investor money to accounts in Europe, Asia and South America. The defendants allegedly used investor monies to make interest payments to other investors, and for lavish personal spending, including for a luxury fishing resort in South America. Sorenson also allegedly took investors on tours of an alleged refinery in Honduras where they were shown the pouring of gold bars.
Larry Lee Adair of Fort Lauderdale, Florida, and Martin M. Werner of Boca Raton, Florida, are also charged in the complaint.
