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Ponzi scheme targets Christians, SEC says

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By Aaron Siegel

May 2, 2008 4:42 pm ET

The Securities and Exchange Commission has obtained a court order halting a $25 million Ponzi-like scheme that targeted Christian communities nationwide.

The SEC charged Safevest LLC of Mission Viejo, Calif., and its two principals for allegedly misappropriating investor funds in the multilevel marketing scheme, which included investors recruited as "consultants" who often solicited other investors, such as people they met in church or who explicitly identified themselves as Christians.

The SEC alleged that Jon G. Ervin, managing director of Safevest, and John V. Slye, its chief executive, and purportedly an ordained minister and missionary, misrepresented that investor funds would be pooled and invested in commodity futures trading. The trades would generate daily profits of 1.5% to 2%, and investors could receive their money back within 72 hours of requesting it, they claimed.

However, no investor money was invested in futures trading, and requests by investors for withdrawal of their funds were honored partially or not at all, according to the SEC's complaint.

The complaint, which was filed in federal court in Santa Ana, Calif., alleges that since at least May 2007, the defendants have raised and misappropriated at least $25 million from more than 500 investors nationwide.

The complaint further alleges that — undisclosed to investors — the defendants paid more than $18 million to investors in Ponzi-like fashion.

The SEC obtained an order freezing the assets of Mr. Ervin and Mr. Slye, Safevest and its affiliates.

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