The SEC obtained an emergency court order to halt a 4-year Ponzi scheme raised $26mn from investors expecting rich returns on water-filtering natural stone pavers.  The SEC filed its complaint in U.S. District Court for the Southern District of New York, charging convicted felon Eric Aronson and others with defrauding investors in PermaPave Companies, a group of firms based on Long Island, N.Y. Profile of Victims. Some 140 individuals, many working in the construction or landscaping business, bit the bait between 2006 and 2010.  They were lured by the prospect of a tremendous backlog of orders for pavers imported from Australia, which could be sold in the U.S. at a substantial mark-up.  They were told to expect monthly returns of 7.8% to 33%.  There was, in reality, little demand for the product, and the cost of the pavers far exceeded the revenue from sales. Maybe Aronson and PermaPave Companies execs Vincent Buonauro Jr., and Robert Kondratick, initially believed in the business.  But they soon began using new investments to make payments to earlier investors, while siphoning the rest for themselves - buying luxury cars and jewelry, and gambling in Las Vegas. Or maybe they didn't believe in the business, because Aronson used investors’ money to make court-ordered restitution payments to victims of his previous scheme to which he pleaded guilty to conducting in 2000.  All three were arrested on Thursday. When investors began demanding money owed to them,  and his attorney, Fredric Aaron, allegedly made false statements to persuade investors to convert their securities into ones that deferred payments owed them for several years. The SEC further alleged that the defendants used some of the investor money to purchase a publicly traded company, Interlink-US-Network, Ltd.  Several months later, that company issued a Form 8-K which falsely stated that LED Capital Corp. had agreed to invest $6 million in Interlink.  That never happened. U.S. District Court Judge Jed Rakoff, who's handling the case, granted the SEC’s request to freeze assets of the defendants and eight relief defendants.  The SEC seeks, among other things, to have defendants return their allegedly illicit profits with prejudgment interest, and pay civil monetary penalties. The SEC’s complaint charges Aronson, Kondratick, Buonauro, the PermaPave Companies, and Interlink with violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and charges Aaron with aiding and abetting the Section 10(b) and Rule 10b-5 violations. The complaint charges Interlink with violations of Section 13(a) of the Exchange Act and Rules 12b-20 and 13a-11 thereunder, and charges Aronson, Kondratick, and Aaron with aiding and abetting these violations. The complaint also asserts violations of Section 5(a) and 5(c) of the Securities Act as to Aronson, Buonauro, and the PermaPave Companies and violations of Section 15(a) of the Exchange Act as to Aronson and Buonauro. SEC NYRO Staff Credits. Investigation by Celeste Chase, Daniel Michael, Desiree Marmita,;  Howard Fischer will lead the litigation.   [SEC PR 11-201, 10/6/11]