6.15.2009 The SEC obtained a court order halting an $11 million Ponzi scheme in which a Chicago-based promoter, David J. Hernandez, who is a convicted felon, promised investors unusually high returns from purported investments in payday advance stores. The SEC alleges that Hernandez “guaranteed investment contracts” through an already defunct company, NextStep Financial Services, Inc. Hernandez allegedly promised returns of 10% to 16% per month and made false and misleading statements about his background, the use of investor proceeds, and the safety of the investment. Among Hernandez’s alleged illicit uses of investor funds was the start-up of a Chicago sports-talk Web site called “Chicago Sports Webio” featuring Chicago-area sports figures and reporters. According to the SEC’s complaint, Hernandez never received his claimed academic credentials, and his banking career ended with the conviction for wire fraud. He never invested in payday advance stores as he claimed, nor did he purchase the insurance policies that he told investors would cover the investors’ funds.
Click http://www.sec.gov/litigation/litreleases/2009/lr21085.htm to access the SEC litigation release.