US SEC Charges BNZ and Its Principals for Running a Ponzi-Like Scheme

​The US Securities and Exchange Commission (SEC) announced that it has filed charges on a California-based company BNZ and its co-founders and co-managers Brett Barber and Louis Zimmerle. According to the announcement, the defendants fraudulently raised $13.5 million from more than 100 retail investors.

The authority noted that since June 2019, BNZ, Barber, and Zimmerle have raised $13.5 million from retail investors by telling them BNZ was in the business of making investments in real estate and alternative investments and promising to pay investors significant returns, generally 10% per year.

According to the findings, the defendants used only $6.4 million of the $13.5 million raised from investors to invest in real estate and alternative investments. In addition, they paid investors returns of at least $1.7 million using funds raised from other investors in Ponzi-like fashion.

"The complaint here alleges that when defendants failed to earn sufficient profits in order to pay investor returns, they made Ponzi-like payments to investors using other investors' money, and, separately, also used investor funds to pay themselves handsomely,"said Michele Wein Layne, Regional Director of the SEC's Los Angeles Regional Office."Individuals who engage in such misconduct should expect to be held accountable for their actions by the SEC."

The complaint seeks permanent injunctions, disgorgement with prejudgment interest, and civil penalties from BNZ, Barber, and Zimmerle, and disgorgement with prejudgment interest from Relief Defendant Guaranteed Income Solutions.

As Fazzaco reported earlier, the commission has recently announced an award of over $2 million to a whistleblower​ who provided information that led to a successful related action by the U.S. Department of Justice (DOJ).