United Trust of Switzerland accused of Ponzi scheme
WASHINGTON - The Securities and Exchange Commission said Thursday it obtained a court order to halt an alleged USD 68 million (CHF 77 million) Ponzi scheme that drew hundreds of US investors to buy false certificates of deposit through a Caribbean bank.
The SEC said two US residents misled investors into believing they were depositing their money in CDs that would provide returns up to 321 percent higher than legitimate bank-issued CDs.
The SEC’s complaint alleges that William Wise and Kristi Hoegel arranged the plan through Millennium Bank and its Geneva, Switzerland-based parent United Trust of Switzerland SA, as well as US-based affiliates of both organisations.
Representatives of Caribbean-based Millennium Bank were not immediately available to comment. Wise and Hoegel could not be reached Thursday for comment.
The SEC charged several other individuals for their roles in the scheme.
"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," Rose Romero, director of the SEC’s Fort Worth Regional Office, said in a statement.
According to the SEC’s complaint, at least USD 68 million was raised from more than 375 investors since July 2004.
The SEC alleges the funds were not used for legitimate banking or investment activities but sent to an account in California, which those involved used to pay for personal expenses and make relatively small Ponzi payments to investors.
A Ponzi scheme is a financial scam in which early investors are paid returns from money deposited by later investors.
Judge Reed O’Connor, in the US District Court for the Northern District of Texas, granted the SEC’s request for an asset freeze and emergency relief for investors.
AP / Expatica