The Securities and Exchange Commission filed an emergency action alleging that several defendants raised nearly $6 million from investors worldwide based on an elaborate Ponzi scheme pitching gold and kidney dialysis clinics. Christopher A.T. Pedras, of Turlock, California and Auckland, New Zealand, as well as Sylvester M. Gray, of Kaysville, Utah, and Alicia Bryan, of Bossier City, Louisiana, were charged with multiple violations of federal securities laws in connection with their roles in the purported scheme. The Commission is seeking injunctive relief, an asset freeze, disgorgement of ill-gotten gains, and civil monetary penalties.
According to the complaint filed by the Commission, Pedras formed several companies, including Maxum Gold Bnk Holdings Limited, Maxum Gold Bnk Holdings, LLC, FMP Medical Services Limited, and FMP Medical Services, LLC. With the assistance of Gray and Bryan, Pedras pitched two investment programs to potential investors: the Maxum Gold Trade Program ("Maxum Gold") and the FMP Renal Program ("FMP Renal")
Maxum Gold was portrayed as an intermediary that allowed banks to trade with one another and avoid legal restrictions. Investors were offered several options to invest in Maxum Gold, ranging from a "starter" program that paid 4% monthly for a six-month term to a "standard" program that paid 8% monthly for twelve months. Investments took the form of investment contracts, and investors were also solicited by Maxum Gold's team of sales agents. Investors were told that the details of the operation were highly secretive:
Who is the Bank of Trade: you will never be given this information, if you did get it, why would you need the Trade Platform, operated by a skilled professional.
In total, more than 50 investors invested in the Maxum Gold program from July 2010 and mid-2012.
After scheduled interest payments to Maxum Gold investors began facing delays in mid-2012, which Pedras blamed on New Zealand regulators, investors were first encouraged to invest more to lock in then-current rates. Later, in early 2013, Pedras and his sales agent team began encouraging Maxum Gold investors to roll over their investment to FMP Renal, which purportedly operated kidney dialysis clinics in New Zealand. In total, Pedras raised nearly $6 million from Maxum Gold and FMP Renal investors.
However, neither the Maxum Gold nor the FMP Renal programs were real. Instead, funds from new investors were used to make principal and profit payments to existing investors - a classic sign of a Ponzi scheme. In addition to paying approximately $2.4 million in purported "profits" to investors, Pedras used investor funds for a variety of unauthorized uses, including (i) $1.4 million in cash withdrawals, (ii) $1.2 million in sales commissions to the sales team, and (iii) approximately $337,000 in retail expenditures that included car payments and travel.
A copy of the complaint is below: