US regulators charge three companies and their principals in a $28 million Ponzi scheme

The US authorities charge three Maryland-based companies and their principals for defrauding 1,200 investors of $28 million.

The complaints from the Securities and Exchange Commission and the Commodity Futures Trading Commission implicate Dennis Jali, John Frimpong, Arley Johnson and their companies, 1st Million LLC, The Smart Partners LLC and Access to Assets LLC, in the Ponzi scheme.

The complaints allege that the defendants fraudulently solicited participants to trade in forex and digital assets through pooled trading accounts controlled by Jali. The defendants told investors that their funds would be used by a team of skilled and licensed traders and promised them risk-free returns of between 6% and 42%.

According to the complaints, the targets of the scheme were often vulnerable African immigrants and members of church communities. The defendants exploited their common ancestry and religious affiliations. Jali claimed to be a pastor, self-made millionaire and an experienced trader. He rented an office to give a false appearance of a legitimate company. The complaints also allege that Jali told participants that he had achieved positive returns of more than 1700%. In an online promotional video he also claimed that his had generated 400% in six weeks, all live trading in real markets”. The complaint claims that the defendants diverted investor funds for personal use and to make Ponzi payments to prior investors.

The complaints allege that between 2017 and 2020, approximately 1,200 contributed around $28 million the 1st Million Pool. The defendants misappropriated around $7 million of those and used them to buy expensive cars, personal travel and living and business expenses.

Kelly L. Gibson, Director of the SEC’s Philadelphia Regional Office said:

As alleged in our complaint, the defendants exploited religious affiliations and cultural affinities to gain investors’ trust. We encourage all investors to be on high alert whenever they are offered investments promising low risk and guaranteed returns, including from members of a trusted community.

The SEC’s complaint charges the defendants with violation of the federal securities law and seeks permanent injunctive relief, return of allegedly ill-gotten gains with prejudgment interest, and civil penalties.

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