The Cherry Hill Courier-Post noted that a nine-count complaint was filed just before Christmas in Superior Court in Newark. The firm taking all the headline heat in the matter is Carr Miller Capital. Its president, Everett Charles Ford Miller, and cousins Ryan J. Carr and Brian P. Carr were named as defendants.
The state of New Jersey is seeking restitution for any investor taken advantage of in the alleged Carr Miller Capital Ponzi Scheme, disgorgement of profits and civil penalties against the trio.
Lawyers for the accused claim their clients did not knowingly participate in any fraudulent activity.
The Philadelphia Enquirer noted on December 22 that unlike others accused of engaging in securities fraud of this type, Carr Miller was properly registered with state securities regulators. However, those licenses were revoked in concert with the registering of the complaint.
The Enquirer reported that Carr Miller Capital LLC promised investors rates of return in the neighborhood of 10 to 15 percent. The firm is reported to have sold unregistered nine-month notes to investors in several states beginning in 2007 until Carr Miller closed its offices in late fall, according to state officials.
"We charge that these defendants operated a Ponzi scheme for their own enrichment at the expense of investors," Said New Jersey Attorney General Paula Dow. "Instead of investing funds to produce high rates of return as promised, we allege that the defendants spent investors' hard-earned money on personal luxuries and indulgences."
It was noted that Carr Miller LLC advanced $1 million to Indigo Energy Inc. in late 2008 to finance drilling operations. A financing agreement also called for Carr Miller to provide additional funds to allow the firm to keep operating. In reality, Indigo is reported to have lost $5 million on revenue of $139,765 in 2009.
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In 2006, Brian Carr agreed to pay a $10,000 fine and $19,787 in restitution for making unsuitable investment recommendations, according to Financial Industry Regulatory Authority records noted in the Enquirer report. Brian Carr was suspended from selling securities.
"These defendants operated a classic Ponzi scheme, using funds from new investors to pay money to earlier investors, all in an attempt to perpetuate the deception," said Thomas R. Calcagni, acting director of the Division of Consumer Affairs, New Jersey. "The promised rates of return sounded too good to be true and, sadly, that turned out to be the case," he said of the consumer fraud allegation.