SEC Targets $7.7M Virginia Ponzi Scheme
The Securities and Exchange Commission (SEC) has filed suit against Nicholas D. Skaltsounis, AIC Incorporated, Community Bankers Securities LLC, John B. Guyette and John R. Graves, all from the state of Virginia, for fraud related to the sale of $7.7 million in AIC promissory notes and stock, according to an article in Bloomberg. It is alleged in the petition that between January 2006 and November 2009, Skaltsounis fraudulently offered and sold AIC promissory notes and stock to some 74 or so investors in at least 14 states, many of whom were elderly and unsophisticated investors.
As is typical in these type schemes, these elderly investors were promised with interest and dividends ranging from 9% to 12.5% on the notes and stock.
Apparently Skaltsounis used $2.5 million of the raised capital from new investors to pay principal and returns to existing investors in the Ponzi scheme. He also took out $952,258 for himself and $3.6 million was used to keep the subsidiary broker-dealers afloat and to help them meet their net capital requirements. Everything came crashing down in December 2009, when Skaltsounis could no longer recruit new investors or solicit investments that would keep the scheme alive by paying back existing investors.