An Ohio man suspected of swindling investors in an elaborate Ponzi scheme has apparently disappeared with millions of dollars in investor funds. Jeffrey Kelly, of Dublin, Ohio, supposedly vanished from his downtown office over the summer, leaving behind office supplies and unpaid rent. While the FBI declined to confirm whether an investigation was ongoing, victims stated that they had been alerted to the alleged scam by the FBI this summer.
In the July 2011 disciplinary actions published by the Financial Industry Regulatory Authority, Kelly entered into a consent order permanently barring him from associating with any securities firm. According to the consent order, Kelly was employed with several brokerage firms starting in 1994. From 2005 to 2010, Kelly was registered as an Investment Company Products/Variable Contracts Representative with three brokerage firms. During this time period, Kelly founded and operated three companies: (1) Superior Financial Resources, LLC ("SFR"), (2) JGK Group, LLC ("JGK"), and (3) Practitioners Wellness Network, LLC ("PWN"). In connection with SFR, Kelly solicited money from investors that would allegedly be loaned to managed real estate companies and businesses. However, contrary to industry rules, Kelly failed to disclose these outside business activities to his employers.
Several victims have filed a complaint against Kelly through the arbitration tribunal of FINRA. In the complaint, they name the three brokerage firms where Kelly was employed from 2005 to 2010, accusing them of contributing to their losses by failing to supervise Kelly. The victims allege that Kelly induced his then-customers to invest in several bogus funds he operated, promising them annual returns ranging from 7% to 10%. According to the complaint, the victims allege losses of approximately $627,000. The attorney representing the victims described the fraud as "a Ponzi scheme right out of the playbook of Ponzi schemes."