SEC Charges Smart Partners for Operating a $27M Ponzi Scheme
By Attorney Jared Levy
Morgan & Morgan’s securities attorneys are investigating an alleged $27 million fraudulent scheme that The Smart Partners LLC and 1st Million LLC perpetrated against over 1,000 investors – most of whom are African immigrants.
The Securities and Exchange Commission recently charged Smart Partners, 1st Million, and their principals (Dennis Jali, John Frimpong, and Arley Johnson) with violations of federal securities laws for operating an alleged Ponzi scheme. The SEC alleges that the defendants engaged in an affinity scheme by targeting African immigrants and emphasizing their common ancestry and religious affiliations to gain their trust.
According to the SEC, the defendants misrepresented that they utilized licensed traders for foreign-exchange and cryptocurrency trading. They also allegedly touted risk-free investment returns ranging from 6 percent to 42 percent. The SEC also asserts that Jali told investors he is a pastor, a self-made millionaire, and expert trader. According to the SEC, Jali rented office space to make it appear that his companies were legitimate.
But the SEC alleges that Jali and his companies were anything but legitimate. The SEC asserts that the defendants used investor moneys to fund their personal lifestyles and to pay earlier investors in a Ponzi-like fashion.
Kelly L. Gibson, Director of the SEC’s Philadelphia Regional Office, stated: “As alleged in our complaint, the defendants exploited religious affiliations and cultural affinities to gain investors’ trust. We encourage all investors to be on high alert whenever they are offered investments promising low risk and guaranteed returns, including from members of a trusted community.”
The SEC has charged the defendants with violating anti-fraud securities laws and seeks the return of investor moneys, injunctive relief, and civil penalties. The SEC also charged Access2Assets as a relief defendant, seeking the return of moneys from the alleged Ponzi scheme.
In addition to the SEC’s action, the U.S. Attorney’s Office for the District of Maryland has filed criminal charges and the CFTC has filed a civil action.
If you have suffered losses relating to the alleged affinity-based scheme perpetrated by Smart Partners and 1st Million, we are here to help. Contact us today to speak with an experienced securities attorney at Morgan & Morgan’s Business Trial Group.
The Business Trial Group at Morgan & Morgan is part of the largest contingency law firm in the nation, with over 600 lawyers and 50 offices. We have helped investors recover tens of millions of dollars of investment losses. We only work on a contingency basis, meaning we are only paid if we successfully recover money for you.