SEC files action to stop $6 million Ponzi scheme in Florida
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Agency obtains temporary restraining order against Neil Burkholz and Frank Bianco.
The Securities and Exchange Commission has filed an emergency action and obtained a temporary restraining order and asset freeze against Neil Burkholz of Boca Raton, Fla., Frank Bianco of Pembroke Pines, Fla., and two companies they control in connection with an alleged $6 million Ponzi scheme that defrauded at least 55 investors.
Many of the defrauded investors are senior citizens or small business owners, the SEC said.
According to the SEC’s complaint, Mr. Burkholz, through his Palm Financial Management LLC, and Mr. Bianco, through his Shore Management Systems, solicited investors by falsely representing that their proprietary options trading strategies were highly profitable.
As alleged in the complaint, the defendants instead invested less than half of investors funds’, resulting in near-total losses.
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The complaint alleges that the defendants misappropriated more than half the funds, using the money to repay other investors and using approximately $880,000 themselves.
According to the SEC’s complaint, the defendants sent false reports to investors to conceal their fraudulent conduct and give investors the false impression they were generating positive returns.
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The SEC’s complaint, filed in federal court in Miami, charges the defendants with securities fraud and seeks emergency relief as well as permanent injunctions, the return of allegedly ill-gotten gains with prejudgment interest, and civil penalties.
The complaint names the defendants’ wives, Rhoda Burkholz and Suzanne Bianco, as relief defendants.
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