WASHINGTON, (Reuters) – The US Securities and Exchange Commission accused Caribbean-based Millennium Bank and its Swiss parent of running a $68 million Ponzi scheme that misled investors about high returns on certificates of deposit, the SEC said yesterday.
A federal judge in Texas agreed to halt Millennium’s sales of certificates of deposit that offered returns up to 321 percent higher than those offered by typical banks, the SEC said in a statement.
“The defendants disguised their Ponzi scheme as a legitimate offshore investment and made promises about exuberant returns that were just too good to be true,” said Rose Romero, head of the SEC’s regional office in Fort Worth. “This case demonstrates that investors need to be especially cautious when placing money with entities that may be outside the reach of U.S. regulators.”
The SEC lawsuit accused Millennium of raising at least $68 million from more than 375 investors since July 2004.
Millennium, which is licensed in St. Vincent and the Grenadines, solicited new investors for its certificates of deposit program through “blatant misrepresentations and glaring omissions” in online solicitations and ads that targeted wealthy investors, the SEC said.
For example, Millennium touted a 75-year banking record of its parent, United Trust of Switzerland SA. But United Trust is not a Swiss-licensed bank or securities dealer, the SEC said.
The SEC lawsuit also accused William Wise of Raleigh, North Carolina, and Kristi Hoegel of Napa, California, with orchestrating the scheme through Millennium and United Trust. Also charged were Hoegel’s mother, Jacqueline Hoegel; Brijesh Chopra; and Philippe Angeloni, the SEC said.