FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
06/01/2015 05:55 PM EDT
The Securities and Exchange Commission charged an investment adviser in Miami with siphoning money from his investment fund and defrauding investors, including several local teachers and law enforcement officers.
The SEC alleges that Phil Donnahue Williamson conducted a Ponzi scheme with money he raised for the Sterling Investment Fund, which purportedly invested in mortgages and properties in Florida and Georgia. Many of Williamson’s investors were public sector retirees such as teachers and law enforcement officers who sought safe investments for their retirement savings. Williamson assured investors there was no risk involved and they would receive annual returns of 8 to 12 percent. But rather than invest their money as promised, he used the majority of fund assets to pay his personal expenses and make supposed returns to investors. Williamson created fictitious valuations that were sent to investors.
“We allege that Williamson lured retired teachers, law enforcement officers, and others into believing that the Sterling Investment Fund was a safe investment generating significant returns,” said Eric I. Bustillo, Director of the SEC’s Miami Regional Office. “Investors entrusted him with their retirement savings, and he spent it as his own money.”
According to the SEC’s complaint filed in U.S. District Court for the Southern District of Florida, one retired Miami-Dade County school teacher and church pastor invested $125,000 in the fund. That same day, Williamson transferred himself $10,000 to pay his credit card bill and make a car payment to BMW among other personal expenditures. Williamson later paid $24,400 to other investors in the fund as purported distributions, and transferred himself another $24,000 to pay additional personal expenses.
In a parallel action, the U.S. Attorney’s Office for the Southern District of Florida today announced criminal charges against Williamson.
Williamson has agreed to settle the SEC’s charges and is liable for $748,050.01 in disgorgement. He also agreed to be permanently prevented from violating the antifraud provisions of the Investment Advisers Act of 1940, including misleading clients or prospective clients about investment strategies, the use of client funds, or his qualifications to advise clients. The settlement is subject to court approval.
The SEC’s investigation was conducted by Casey Cohen and Margaret Vizzi in the Miami office, and the case was supervised by Assistant Regional Director Jason R. Berkowitz and Associate Regional Director Glenn S. Gordon. The litigation will be handled by Andrew O. Schiff. The SEC appreciates the assistance of the U.S. Attorney’s Office for the Southern District of Florida, the Federal Bureau of Investigation, and the Florida Office of Financial Regulation.