by Howard Haykin

In or about 2016, Pierre formed an informal investment club with his brothers and sister, along with a few friends. Each club member contributed about $2,500, and they each researched and suggested specific stocks to buy. By 2017, Pierre became the sole stock-picker and he formalized the investment club, naming it “Amongst Friends.” He also expanded the club beyond the initial family and friends.

RAISING FUNDS AND OPERATING ‘AMONGST FRIENDS’.    Pierre raised funds for Amongst Friends by issuing Promissory Notes to investors, who were predominantly Haitian New Yorkers. Investors were promised unrealistically high rates of return of at least 20% every 60 days. The Notes all lacked maturity dates and they all stated that the purpose of the investment group was “to invest the assets of the group in stocks, other securities, Digital Currencies, commercial & Residential Rental property.”

That said, Pierre deposited much of those funds - $1,404,000 – into brokerage accounts that had been opened years earlier and were registered in his own name. Pierre invested that money in stocks and incurred heavy losses. By March 2019, he had lost a total of $1,425,000, which he managed to conceal from investors by:

• using new investor funds to pay older investors;
• issuing false account statements showing investment gains;
• dissuading investors from redeeming their money and offering to reinvest their interest; and,
• using money embezzled from a former employer to make interest payments to investors.

[For further details, click on SEC Complaint.]

[For further details on Affinity Frauds and how to avoid getting scammed, click on Financialish 12/4/19 Post.]