Monday, January 26, 2009

California Authorities Move Against $52 Million Alleged Ponzi Scheme

Six principals of Orange County, California-based Carolina Development Co. were charged Thursday with operating a Ponzi-type investment fraud, offering high returns in purported real estate developments near prestigious golf courses in Southern California. According to prosecutors, Lambert Vander Tuig, 50, of Rancho Santa Margarita, California and the former president of Carolina Development, together with former vice president, Jonathan Carman, 45, of Laguna Hills, were at the center of the fraud that cost more than 1,000 investors at least $52 million. Other co-conspirators in the case include: Mark Sostak, 50, of Ladera Ranch; Soren Svendsen, 43, of Coto de Caza; Scott Yard, 47, of Costa Mesa; Robert Waldman, 48, of Irvine. With the exception of Yard who has not yet been arrested, and Waldman who is expected to turn himself in today, all are being held pending hearings. They have all been charged with grand theft and securities fraud in connection with making unregistered fraudulent offers, sales and purchases of securities. The SEC previously won major judgments against Vander Tuig and Carman. The alleged conspirators played off famous golfing names such as Greg Norman and Arnold Palmer.

Read the story here, here and here.

Read the SEC's original litigation release here.

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