San Diego Advisor Charged with Running $7 Million Ponzi Scheme
The SEC has charged a California investment advisor and several entities he allegedly controlled with running a Ponzi scheme that resulted in $7 million in losses to his clients, the regulator says.
Christopher Dougherty, through his own California-registered investment advisor, C&D Professional Services, Inc. (dba C&N Wealth Management), allegedly offered his clients tax-free investments in private placements that purportedly came with roughly 5% quarterly dividends, according to a litigation release published by the SEC.
But the regulator alleges there were no private placements and that Dougherty simply took new investor money and used it to pay dividends to existing investors and to cover his own personal expenses, according to the litigation release.
In addition, Dougherty allegedly offered investments in his farm and real estate business, but those funds were allegedly commingled with C&D Investments and were part of the scheme, the SEC says.
The regulator has charged Dougherty and the companies he controlled with violating antifraud provisions and is seeking permanent injunctions, disgorgement of allegedly ill-gotten gains with interest and civil penalties, according to the litigation release.
Dougherty is also facing criminal charges related to the scheme from the San Diego District Attorney's Office, the SEC says.
In October, Dougherty and his wife filed for personal bankruptcy, according to the litigation release.