The defendants allegedly told investors that Bullard Enterprises’ FlagShip and Platinum Funds will use their money to trade foreign currencies. They also allegedly misrepresented to investors that their investments were profitable by providing them falsified periodic account statements.
In reality, the defendants did not use investors’ money to trade currencies. The defendants used new investors’ money to pay purported “returns” to earlier investors.
Bullard and his wife also used investors’ money for their personal expenses and their other businesses including a horse racing stable, a limousine service, and a health and fitness studio.
The defendants’ conduct is a classic example of a Ponzi sheme, an investment fraud involving the use of new investors’ funds to make payment of purported returns to existing investors.
Ponzi scheme operators usually lure investors to invest in opportunities, which they claimed to generate high returns with minimal or zero risk.
According to the SEC, the defendants violated the anti-fraud provisions of the federal securities laws by operating a Ponzi scheme.
