(HedgeCo.Net) The Securities and Exchange Commission has charged Wilson Baston with defrauding numerous investors in an alleged Ponzi scheme, in which he raised millions of dollars through dozens of transactions purportedly to fund real estate investments, but frequently used the money to instead pay off earlier investors and for personal expenses.
In 2008, Baston pleaded guilty to deceiving hundreds of investors in a Ponzi scheme. According to the SEC’s complaint, soon after his release from prison in 2017, Baston began using aliases, including Chanon Gordon, and presented himself to investors as having expertise in the real estate industry. The complaint alleges that Baston solicited investors to invest with Gordon Management Group LLC, a purported real estate company, by telling them that their money would be used for the purpose of funding specific real estate transactions. In exchange, Baston allegedly gave the investors short-term promissory notes, stating that the money would be returned to them within days or weeks along with a substantial fee, equal to as much as 25 percent of the investment. In some cases, Baston also promised investors a percentage of profits from a transaction. The complaint alleges that, instead of using investor money solely to fund the real estate transactions he promised, Baston used the money to pay earlier investors and for his own personal expenses and benefit.
“As we allege in our complaint, Baston deceived investors by using an alias to conceal his criminal history and by initially making payments to create the false appearance of a successful investment strategy,” said Tejal D. Shah, Associate Regional Director of the SEC’s New York Regional Office. “This case is yet another example of the SEC’s constant efforts to stop those who profit from lies at the expense of investors.”
The SEC’s complaint, filed in the Federal District Court for the Southern District of New York, charges Wilson Baston with violating the antifraud provisions of the Securities Act of 1933 and Securities Exchange Act of 1934 and seeks permanent injunctive relief; disgorgement plus prejudgment interest; a civil penalty; a conduct-based injunction, which, among other things, would prohibit his future participation in the sale of promissory notes and investment contracts; and an officer and director bar.
In a parallel action, the U.S. Attorney’s Office for the Southern District of New York today announced criminal charges against Wilson Baston.
