SEC files action to stop $6 million Ponzi scheme in Florida

Agency obtains temporary restraining order against Neil Burkholz and Frank Bianco

Nov 19, 2019 @ 12:24 pm

By InvestmentNews

The Securities and Exchange Commission has filed an emergency action and obtained a temporary restraining order and asset freeze against Neil Burkholz of Boca Raton, Fla., Frank Bianco of Pembroke Pines, Fla., and two companies they control in connection with an alleged $6 million Ponzi scheme that defrauded at least 55 investors.

Many of the defrauded investors are senior citizens or small business owners, the SEC said.

According to the SEC's complaint, Mr. Burkholz, through his Palm Financial Management LLC, and Mr. Bianco, through his Shore Management Systems, solicited investors by falsely representing their proprietary options trading strategies as highly profitable.

As alleged in the complaint, the defendants instead invested less than half of investors' funds, resulting in near-total losses.

[Recommended video: Bernie Clark: Zero commissions give advisers more opportunity to win clients]

The complaint alleges that the defendants misappropriated more than half the funds, using the money to repay other investors and using approximately $880,000 themselves.

According to the SEC's complaint, the defendants sent false reports to investors to conceal their fraudulent conduct and give investors the false impression they were generating positive returns.

[More: SEC highlights enforcement actions involving advisers and brokers]

The SEC's complaint, filed in federal court in Miami, charges the defendants with securities fraud and seeks emergency relief as well as permanent injunctions, the return of allegedly ill-gotten gains with prejudgment interest, and civil penalties.

The complaint names the defendants' wives, Rhoda Burkholz and Suzanne Bianco, as relief defendants.

[More: Remember Bernie Madoff? Big-time financial fraud is back]

0
Comments

What do you think?

View comments

Recommended next

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print