PHOENIX (CN) - The married couple who run BraveHeart Women Global Community, an "online, motivational community that would empower women to reach their highest and best potential," defrauded investors of at least $3.9 million, a doctor and her husband claim in Federal Court.
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Dr. Shermann Singleton and her husband Ricky Marcy sued motivational speaker Ellie Drake (Elham Safdari-Drake) and her husband, Charles Drake, and a slew of their BraveHeart Women LLCs.
The plaintiffs claim Drake and her husband offered them "a 15 percent membership interest" in BraveHeart Women Global Community for $1 million. The Drakes said the plaintiffs "would receive certain profits from their own personal efforts to grow the company and from the overall profits generated from the company," according to the complaint.
"This litigation is a classic 'Ponzi' scheme where the Drakes defrauded plaintiffs as well as other investors out of millions of dollars that were invested in the Drakes' various companies on the promise of a swift 'return on their investment' and the hope of building an online, motivational community that would empower women to reach their highest and best potential," the complaint states. "As set forth in the following paragraphs, despite the Drakes' representations, the Drakes squandered plaintiffs' as well as other investors' monies that were invested in the BraveHeart Women concept, and use plaintiffs' investment money for their own personal benefit."
Dr. Singleton describes herself in the complaint as "a well renowned life and personal development coach for numerous women." She claims the Drakes promised her "40 percent of the profits (approximately $180,000 per year) of all BraveHeart Women training seminars and retreats that she was involved in and 15 percent of the profits (approximately $50,000 per year) for those events where Dr. Singleton was not involved in."
The Drakes also promised that Singleton "would receive 70 percent of the profits from the sale of her media products, and 15 percent of the profits from the sale of Mrs. Drake's media product," the complaint states.
But it didn't happen that way, Singleton says. She claims the Drakes diverted the money to "other newly formed companies" for "their own lavish lifestyle at the expense of plaintiffs and other persons that invested millions of dollars in the Drakes' various companies and to defraud their other creditors."
Singleton claims the Drakes received at least $3.9 million from investors, including $1.1 million from her and her husband, and that the Drakes owe them $950,000. the complaint says.
The Drakes falsely claimed to be the only members and owners of BraveHeart, and failed to disclose that another couple, Doug and Carol Carroll, were also investors, the complaint states.
The Carrolls invested about $300,000 in BraveHeart "in exchange for a 15 percent ownership interest in the company, while plaintiffs invested over $1 million in the company for a similar membership interest," the complaint states.
Singleton and Marcy seek compensatory, general, and special damages; they want the BraveHeart entities dissolved and its assets sold and distributed to investors.
They are represented by Gregory Miles and David Williams, with Davis Miles McGuire Gardner, of Tempe.