SEC Freeze Assets in Alleged Diamond-Themed Ponzi Scheme

The SEC alleges that Richard Dalton and Universal Consulting Resources LLC (UCR) raised approximately $17 million from investors for two fraudulent offerings. The programs were generally referred to as the “Trading Program” and the “Diamond Program.” See the SEC press release here.

Investors in the allegedly fraudulent programs received monthly payment from UCR bank accounts that were said to be profits from successful trading; however, there is no evidence to substantiate $10 million profit claimed by the two programs.

The SEC claims that that most of the money that came into the UCR bank accounts were actually funds received from new investors. It is believed that the Daulton and UCR used these newly acquired funds to make the monthly payments to existing investors, while continuing to recruit new investors in order to keep the scheme running.

The SEC claims that during this time Daulton used investor funds to purchase a home, a vehicle, and pay for his daughter’s wedding reception.

According to the SEC’s complaint Daulton told investors that their money would be held in an escrow account in a U.S. bank, and that the funds would be used to obtain leveraged to purchase and sell bank notes, but that the funds themselves would never be used.

Daulton promised 4-5 percent monthly returns for investors in the “Trading Program” and 10 percent monthly returns for investors in the “Diamond Program.” That basically 50-60 percent annual return for “Trading Program” investors and 120 percent returns for “Diamond Program” investors.

Earlier this week the SEC was granted a request to freeze UCR’s assets. In addition to emergency relief for investors the SEC is seeking permanent injunctions, disgorgement plus pre-judgment interest, and financial penalties against all of the defendants.

These types of returns, with very low to no risk should always raise a red flag for investors. High returns typically come with high risks, and in turn low risk investments typically see lower returns. As with anything else, investment opportunities that seem too good to be true often are.

If you have been the victim of investment fraud it is not your fault. The investment fraud attorneys at The Hayes Law Firm have been helping fraud victims for years and can help you too. Please contact us for a free consultation with an investment fraud lawyer.

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