The federal watchdog accused the sales agents, for enticing and cheating investors by promising them for higher returns up to 12 to 14%, when they sold investments offered by Agape World.
SEC alleged that they falsely persuaded the investors that only 1% of their principal was at stake and the Agape securities they promoted were actually non-existent, and investors were only lured into a Ponzi scheme where earlier investors were paid with new investor funds.
The agents willfully sold the false investments and pocketed over $52m in commissions and payments out of investor funds.
During its course of investigation, SEC also realized neither the agents nor their firm Agape was registered with the SEC to sell securities.
Commenting on the fraud case, SEC’s New York Regional Office Acting Regional Director Andrew Calamari said this Ponzi scheme spread like wildfire through Long Island’s middle-class communities because this small group of individuals blindly promoted the offerings as particularly safe and profitable.
"These sales agents raked in commissions without regard for investors or any apparent concern for Agape’s financial distress and inability to meet investor redemptions," Calamari added.
The SEC had filed a case in the US District Court for the Eastern District of New York against the agents and claimed that more than 5,000 investors nationwide were impacted by the scheme that lasted from 2005 to January 2009.
