Boston Accident and Injury Lawyer
May 22, 2010 – Edward Allen and David Olson operated their real estate company, A & O Investments, LLC, as a Ponzi scheme according to the Securities and Exchange Commission (“SEC”). The SEC’s complaint filed in an Ohio federal court claims that from September 2005 to December 2008 Allen and Olson raised about $14.8 million from at least 100 investors.
Apparently, A & O Investments enticed buyers by offering promissory notes with annual interest rates of 20%. Allegedly, Allen and Olson claimed that the money raised from the notes would be used to purchase and rehabilitate real estate, primarily in Florida. The complaint further alleges that A & O would profit from sales of the refurbished real estate and Allen and Olson represented to clients that they had been making successful transactions.
The SEC alleges that Allen and Olson recruited investors by sending mass mailings and word of mouth. Also, Allen and Olson apparently solicited customer of their former employer World Group Securities, Inc., a Georgia based securities broker-dealer.
The complaint contends that Allen and Olson did not use investor funds solely for real estate purchases. In reality, according to the SEC, Allen and Olson used at least $4.4 million to make interest and principal payments to investors, $2.2 million for their personal use, and only $5.5 million to purchase and rehabilitate real estate. The SEC further claims that Allen and Olson misrepresented the adequacy of collateral securing the notes and even secured $5.5 million in notes on one piece of Lakeland, Florida property, which was not worth enough to secure the notes.
The SEC is seeking permanent injunctions against Allen, Olson, and A & O from further violating securities laws, as well as disgorgement of ill gotten gains and civil penalties. The case is ongoing in the US District Court for the Northern District of Ohio.
Source: SEC
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If you invested with A & O Investments, LLC, Edward Allen, and/or David Olson, or are the victim of some other type of investment fraud, the Law Offices of the attorney, and its affiliates, is prepared to review your situation and potential claim(s) without charge, and will consider representing you on a contingent fee basis, which means that you will not have to pay out of pocket for your legal representation. The firm will take a fee only if we are successful in recovering your assets.
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