Court Awards $936,000 Ponzi Scheme Judgment
2/28/2014 7:31:00 AM,
(CN) - A federal judge granted the U.S. Securities and Exchange Commission more than $936,000 in a default judgment against a Florida woman running a Ponzi scheme involving immigration bail bonds.
The SEC commenced it action against Jenny Coplan of Tamarac, Fla., seeking injunctive, declaratory and monetary relief for her alleged violations of federal securities laws.
The agency claimed that between 2009 and 2011, Coplan enticed about 90 individuals to entrust her with their money, which she said she'd then turn over to a broker to invest in immigration bail bonds.
An immigration bond is similar to a traditional bail bond, the difference being that the amount is set by immigration agents or an immigration judge. In practice, it is the amount a person must pay before being released from immigration detention.
According to the SEC, Coplan offered and sold securities in the form of promissory notes and investment contracts through her company Immigration General Services LLC. In doing so, the agency said, she promised them their money was secure and promised high rates of return.
However, neither she nor her company invested any of the funds as promised.
"In reality, Coplan, in classic Ponzi-scheme fashion, utilized investor funds to pay earlier investors, representing those payments as interest or profits and principal repayments," wrote U.S. District Judge Robin Rosenbaum in her 17-page opinion.
Coplan then took the difference between new investments and old, and misappropriated it for her personal use, Rosenbaum said.
In all, Coplan raised approximately $4 million through her fraudulent scheme, returned approximately $3.1 million of this amount to investors, and misappropriated at least $878,000 in investor funds for her own use, the judge said.
In addition, Coplan actively solicited investors and acted as a broker when she in fact is not a registered broker-dealer. The court found her actions to be egregious and recurring, warranting a permanent injunction against her.
"The factual allegations further indicate that this was not an isolated occurrence, but rather a systematic and calculated plan to deceive investors," Rosenbaum wrote.
The $936,000 judgment represents a disgorgement of Coplan's ill-gotten gains. Rosenbaum also ruled Coplan must pay a civil penalty to the SEC, the amount to be determined by a five-member commission panel.
Rosenbaum entered the default judgment against Coplan after she failed to respond to the SEC's complaint.
"The Court finds that the Complaint sufficiently establishes that Coplan's conduct created substantial losses or the risk of substantial losses to other persons inasmuch as she is alleged to have amassed nearly $4 million in investor contributions and misappropriated hundreds of thousands of dollars," Rosenbaum wrote. "Furthermore, as Coplan has not made an appearance in this matter, she has made no showing with respect to her current and future financial condition. The Court therefore concludes that a civil penalty should be imposed against Coplan."