A Miami man is facing civil and criminal fraud charges after authorities say he ran a Ponzi scheme that raised over $2 million from numerous public sector retirees including law enforcement officers and teachers. Phil Donahue Williamson, 48, faces charges from both the Securities and Exchange Commission and the U.S. Attorney's Office that he misappropriated or misused nearly $1 million in investor funds raised under the guise of investing in distressed real estate. While Williamson has agreed to settle the Commission's charges by paying nearly $750,000 in disgorgement of ill-gotten gains, the criminal charges remain pending.
According to authorities, Williamson operated as an unregistered investment adviser based in Miami, Florida. Touting investment vehicles he had purportedly formed to invest in distressed properties in Florida and Georgia, Williamson solicited investors, including public sector retirees, with the promise of an annual return ranging from 8% to 12%. Williamson's investors came not only through word-of-mouth, but also from Williamson's hosting of financial seminars at local churches. Potential investors were assured that their investment was risk-free, and that their funds would be available at any time. Some investors were even assured that Williamson would make them whole in the event anything happened to their invested principal. In total, Williamson raised over $2 million from at least 17 investors.
However, Williamson is accused of failing to invest funds as promised. Instead, Williamson allegedly commingled investor funds, misappropriated funds for his own personal use, and used investor funds to pay returns to existing investors - a classic hallmark of a Ponzi scheme. Indeed, of the $2 million raised from investors, Williamson paid nearly $700,000 in purported "returns," nearly $400,000 in personal expenses such as mortgage and BMW payments as well as his children's tuition, and nearly $400,000 in transfers to third parties that appear to be unrelated to the promised investment.
The Commission's complaint is below.