SEC Charges Florida Man with Affinity Fraud Scheme
SEC Charges South Florida Man in Alleged $11M Affinity Fraud Scheme
The SEC recently charged George Elia, a recent resident of Oakland Park, Florida, and Fort Lauderdale-based International Consultants & Investment Group Ltd. Corp. (“International Consultants”) with defrauding approximately 25 investors out of $11 million in an alleged investment fraud scheme.
According to the SEC’s complaint, Elia orchestrated the investment scheme through his company, International Consultants, from March 2005 to January 2012. Elia allegedly made investors believe that he could earn them exceptionally high returns by lying to them about his track record and his current trading activities.
The SEC says he falsely claimed that he had a long track record of day trading stocks and exchange traded funds to yield annual returns of up to 26%. He also allegedly told investors that his trading on behalf of other investors was rendering quarterly returns of up to 20%.
In reality, the complaint alleges, “Elia’s trading resulted in losses or only marginal gains in limited time periods.” He allegedly perpetuated the scheme by issuing falsified quarterly account statements, which showed overstated returns, to his investors.
He also is accused of misappropriating funds, and using some of the investment funds to pay his personal expenses and an associate who was responsible for introducing him to new victims. Neither Elia nor International Consultants was ever registered with the Commission as an investment adviser.
The SEC is calling the investment fraud scheme an affinity fraud scheme “in part,” because “a number of the investors were members of the gay community in Wilton Manors, Florida.” Further, many of Elia’s clients came to him through word-of-mouth referrals from friends and relatives.
"Elia's blatant fraud and cruel deceptions have wrecked the lives of investors and their families," said Eric I. Bustillo, Regional Director of the SEC's Miami Regional Office. "This is a sad lesson that investors must always be skeptical of claims of high and steady investment returns, even when the manager is recommended by trusted friends or members of one’s own community."