The Securities and Exchange Commission announced on Tuesday that an emergency action had been filed, a temporary restraining order obtained, and an asset freeze to stop an alleged Ponzi scheme carried out by Shakopee residents Jason Dodd Bullard and Angela Romero-Bullard.
Bullard and Romero-Bullard have used the entity they control, Bullard Enterprises LLC, to carry out the Ponzi scheme, the SEC alleged in its report.
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The SEC also named four relief defendants in the action, as the entities controlled by the two received investor funds from the alleged scheme.
The SEC's complaint, filed in the United States District Court for the District of Minnesota, said that from 2007 to 2021, the defendants raised approximately $17.6 million from as many as 200 investors. The investments were used in Bullard enterprises' purported Flagship and Platinum funds.
The report said that Bullard and Romero-Bullard allegedly told investors, primarily friends and elderly family members, that their investments would be used to trade foreign currencies. The two then sent investors account statements showing that the accounts continued to increase in value.
"Many of the investor-victims in this case were friends and family of Bullard and Romero-Bullard who trusted their promises about investment strategy and expected returns," Nekia Hackworth Jones, the Director of the SEC's Atlanta Regional Office, said. "As alleged in the complaint, Bullard and Romero-Bullard breached that trust for years."
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However, the complaint said that Bullard Enterprises stopped trading in foreign currencies in 2015, and the defendants were using new investor money to pay purported "returns" to existing investors.
The complaint also showed that Bullard and Romero-Bullard misappropriated investors' money to support other businesses they owned. This included a horse racing stable, limousine service, and health and fitness studio.
"Instead of delivering on their promises, these individuals used false statements and fraudulent documents to convince investors to pour millions of dollars into bank accounts used almost exclusively for Ponzi-style payments and for their personal benefit," Hackworth Jones said.
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The complaint from the SEC charges the defendants with violating the antifraud provisions of the federal securities laws. It not only asks for temporary relief, but the complaint also seeks preliminary and permanent injunctions, disgorgement, prejudgment interest, civil penalties, and an asset freeze, among other things.
The investigation from the SEC is ongoing and being conducted by enforcement staff in the Atlanta Regional Office.