The Securities and Exchange Commission filed an emergency action charging that a deceased Florida man who once served as President of the South Florida AARP had been running an offshore Ponzi scheme that took in at least $4.6 million from dozens of investors. In a complaint filed last week, the Commission alleged that Joseph Laurer, a/k/a Dr. Josef V. Laurer, ran the scheme through a company he controlled in the Turks and Caicos until his death on May 15, 2014. The Commission is seeking declaratory relief, disgorgement of ill-gotten gains, and the repatriation of assets currently being held outside the United States.
Laurer was a resident of Homestead, Florida, where he was a member of the City of Homestead's General Employee Pension Board and later served as President of the Dade County chapter of the AARP. According to the Commission, Laurer founded Abatement Corp. Holding Company Limited ("Abatement Corp.") in 1994 in the Turks and Caicos Islands, a series of tropical islands in the southeast Bahamas island chain. Beginning in 2004, Laurer is accused of soliciting investors, many of whom were family and friends, to invest in various entities and funds with names similar to Abatement Corp., including the International Balanced Bond Fund ("IBBF"). Through a website he established as well as documents provided to prospective investors, Laurer touted risk-free and tax-free investments in corporate and government bonds that promised annual returns ranging from 4% to 6%. Investors were also told that the investments were guaranteed through the "F.D.I.C. or the S.I.P.C." During the ten-year period from 2004 until Laurer's death in May 2014, approximately 50 people invested at least $4.6 million with Laurer and Abatement Corp.
However, the Commission alleged that Laurer's promises and representations relating to Abatement Corp. and the purported investments were false. This included that neither the FDIC nor SIPC guaranteed the investments, that Abatement Corp. was not investing in bonds, and that by July 2007 Abatement had ceased purchasing new investments and relied entirely on investor funds to pay "returns" to existing investors. Investor funds were also diverted to Laurer's wife, Brenda M. Davis, for her living expenses and the purchase of at least two homes. Additionally, Laurer is accused of using investor funds to sustain his lavish lifestyle as well as for payment of premiums on a $500,000 life insurance policy. After Laurer's death in May 2014, Davis received approximately $510,000 in life insurance proceeds.
At the time of Laurer's death, approximately $900,000 remained in various Turks and Caicos bank accounts held in the name of or for the benefit of Abatement Corp.
The Commission's Complaint is below: