Texas Man Charged With $114 Million Ponzi Scheme

"The return on this investment is so tremendous, it is worth that amount many, many times over...and it is certainly worth paying a very generous interest rate in order to secure the funds."

- Investor offer letter

The Securities and Exchange Commission has filed civil fraud charges against a Houston businessman, alleging that he raised over $100 million from hundreds of investors over an 11-year period.  Frederick Alan Voight, 58, of Richmond, Texas, was the subject of an enforcement action filed by the Commission alleging multiple violations of federal securities laws.  Voight ironically recently served as the vice president of investments for a publicly-traded company, Intercore, Inc. ("Intercore"), which was developing a "Driver Alert Detection System" for drowsy drivers and whose affiliation Voight allegedly touted in pitching potential investors.   Voight consented to the imposition of asset freezes and permanent injunctions against himself and his company, DayStar Funding L.P. ("DayStar"), and also agreed to disgorge ill-gotten gains and pay civil penalties in an amount to later be determined.  The Commission also named several entities as Relief Defendants, including F.A. Voight & Associates, LP ("FAVA"); Rhine Partners, LP; Topside Partners, LP; Intercore; and a Canadian subsidiary of Intercore.

According to the Commission, Voight formed FAVA in 2004 and solicited investors for a series of 1-year promissory note offerings for the stated purpose of funding research and development activities with which Voight was associated, including Intercore.  Intercore, which Voight joined in June 2013, previously listed him as the Director and Vice President in a page which has since been removed from the internet (but a cached version is available here).  In a recent filing with the Commission, Intercore announced Mr. Voight's resignation of his position as Vice President of Investments and his seat on the company's Board of Directors.  

The Commission alleges that Voight raised at least $114.1 million from hundreds of investors who believed they were investing in lucrative promissory note offerings touted by Voight.  The Complaint focuses on several offerings occurring within the last year through DayStar that offered sky-high annual returns deriving from an acquisition to be made by Intercore.  Beginning in October 2014, potential investors were told of a "tremendous" and "time-sensitive" investment opportunity that could yield annual returns of up to 42% - based on how quickly an investment was made.  Investors were told that DayStar would loan their funds to Intercore to acquire another company and install its drowsy driving alert systems in "several million trucks and buses." Since October 2014, Voight and DayStar raised approximately $14 million based on these representations.

However, according to the Commission, no such lucrative and "time-sensitive" opportunity existed.  Nor was Intercore in a position to pay such returns based on its precarious financial position.  Indeed, of the approximately $14 million raised during the drowsy driving offerings, over $7 million was used to make Ponzi-style payments to investors in previous offerings through FAVA and DayStar.   Additionally, nearly $5 million of investor funds were funneled by Voight - then a 45% shareholder of Intercore - to his alter ego entities, Topside and Rhine, which in turn made favorable loans to Intercore.  None of these benefits accrued to the drowsy driving offering investors.  Those funds were apparently transferred to Intercore's Canadian subsidiary, Intercore Canada Research, Inc. ("IRC")

Intercore publicly announced in April 2015 that unauthorized individuals posing as IRC employees had stolen a substantial amount from IRC, including the nearly-$5 million transferred by Intercore.  Intercore announced in a filing with the Commission in early July that Voight had resigned his positions with the company.

At least $22 million of investor funds is believed to remain unaccounted for.  

The Commission's complaint is below: