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Main | Ninth Circuit Allows Recovery Of Investor Referral Fees Paid In $120 Million Ponzi Scheme »

New Jersey Couple Accused Of $5 Million Ponzi Scheme

A Princeton couple has been accused by New Jersey authorities of running a $5 million Ponzi scheme to fund a lavish lifestyle that included "country clubs, private schools, and tropical vacations."  Ford and Katherine Graham were named in a lawsuit filed by the New Jersey Bureau of Securities accusing the couple of numerous violations of the New Jersey Uniform Securities Law.  The complaint seeks disgorgement of any profits, restitution for investors, imposition of civil penalties, and injunctive relief. 

Ford Graham controlled and operated a number of companies including CCC Holdings, Specialty Fuels Americas, LLC, Aries Energy Group Venture, LLC, Rattler Partners, LLC, and Vulcan Energy International, LLC (the "Companies").  Beginning in 2013, Graham solicited investors for the companies through promises that their funds would be used for specific oil and gas projects carrying little to no risk.  For example, one purported project claimed that investor funds would be used to acquire a controlling interest in a company that purportedly had a claim against oil company British Petroleum deriving from the 2010 oil spill in the Gulf of Mexico that was worth between $7 million and $9 million.  Another investment opportunity promised guaranteed 6% annual returns from a "Dominican Republic Oil Transaction," while yet another investment promised that funds would be used to build a tank.  In total, Graham raised more than $5 million from unsuspecting investors.

According to the New Jersey Bureau of Securities, Graham's claims were false and in reality investor funds were used to perpetrate a Ponzi scheme in which new investor funds were used to pay purported returns and distributions to existing investors as well as funding the Grahams' lavish lifestyle.  The complaint details the alleged misappropriation of investor funds from various investments, including transfers to other investors and to Katherine Graham, spending at an Antiguan resort and at the couple's country club, and payments to the private school where the Grahams' child attended.  While Ford Graham is accused of playing a primary role in recruiting investors, the complaint also alleges that Katherine Graham - who received a law degree from Tulane University - encouraged at least one investor to invest based on the safety of the investment, that she was also planning to invest, and that time was of the essence if the investor wanted to realize the promised return. 

A copy of the complaint is below:

Graham Filed Complaint by on Scribd

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