Virginia Man Pleads Guilty To $40 Million Prime Bank Ponzi Scheme

Preston David Pinkett, II, 68, of Alexandria, Virginia, pleaded guilty today to conspiracy to commit mail fraud in connection with an international investment scheme involving his front company, International Fiduciary Corporation, S.A. According to prosecutors, Pinkett and others defrauded at least 180 by convincing them to invest some $40 million in IFC between 2004 through 2006. Pinkett and 2 Canadian co-conspirators promised investors a return of 6% per month by purchasing "1st tier medium term bank notes" at a discount and then sold them for a profit. In February, Pinkett, along with Malcolm Cameron Boyd Stevenson and Daniel Eric Byer, both of Abbotsford, British Columbia, were ordered by the B.C. Securities Commission to disgorge CAN$12.7 million plus pay a CAN$4 million fine for their part in defrauding 89 Canadian investors. In the domestic criminal case, Pinkett faces up to 20 years in prison and a $250,000 fine upon sentencing which is scheduled for March 6, 2009.

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Read the SEC's original litigation announcement here.

Missouri Man Sentenced To Prison In $2.8 Million Prime Bank Scam

Jack A. Calvin, 67, of Ozark, Missouri, was sentenced to 16 years in prison yesterday for operating a "prime bank" securities fraud scheme. Calvin was originally indicted in January 2007 on 3 securities fraud counts to which he plead guilty to one count in November 2007. The indictment alleged that he had defrauded at least 115 investors out of more than $2.8 million between 1999 and 2002 by offering for sale securities in an entity called Growth Benefit Systems, a fictitious trading system business. Investors were told that investment funds would be pooled to purchase prime bank instruments that yielded as much as 20 percent returns. In 2003, the SEC took administrative action against Calvin and obtained a default judgment against him in excess of $6 million.

Read the story here.

Read the SEC's litigation release here.

Read the DOJ's announcement here.