The SEC said two Michigan men, John Bravata and Richard Trabulsy, promised investors annual returns of 8 percent to 12 percent, then used money from recent investors to pay older investors -- the definition of a classic Ponzi scam.
In the meantime, the pair lived large. Their personal holdings include a $6 million vacation home, a catamaran worth half a million dollars and a $120,000 Ferrari, The Detroit News reported Wednesday.
"In short, the fraud defendants have run BBC (Billionaire Boys Club) Equities into the ground. Their malfeasance has rendered it financially insolvent," the SEC said in a court filing.
The complaint says the pair frequently solicited investments through lunch seminars that catered to the elderly.
On a Web site, Bravata, a former police officer, is quoted as saying, "my philosophy is that it's safety first, returns second," the newspaper said.
Copyright 2009 by United Press International.
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