SEC charges four with free-dinner scheme in Florida that fraudulently targeted the elderly

The Securities and Exchange Commission has charged four individuals with organizing fraudulent “free dinner” investment seminars in Florida.

Philadelphia residents Joseph Andrew Paul and John D. Ellis Jr. lied about the track record of their investment advisory firm, Paul-Ellis Investment Associates, and recruited James S. Quay of Atlanta and Donald H. Ellison of Palm Bay, Fla. “to lure potential victims with promises of lofty returns,” the SEC alleged in a complaint Monday.

Between July 2011 and February 2012, Mr. Quay and Mr. Ellison were able to raise nearly $1.3 million from investors for Paul-Ellis Investment Associates through Aptus Planning LLC, a firm they founded in Tampa, Fla., that purportedly provided financial planning for senior citizens, according to the agency’s complaint filed in the U.S District Court for the Eastern District of Pennsylvania.

None of the defendants could immediately be reached for comment.

Mr. Paul and Mr. Ellis allegedly created fraudulent marketing materials, including some with performance numbers that were “cut and pasted” from another firm’s website, the SEC said. Mr. Quay and Mr. Ellison used the materials to mislead seniors who responded to their mass-mailing offer to attend a free dinner at a restaurant in Tampa, according to the SEC’s statement announcing the charges.

“A large portion of the money was never invested but instead was split among these self-described investment experts whose only real expertise was stealing other people’s money,” Sharon Binger, director of the SEC’s Philadelphia Regional Office, said in the statement on the free-dinner scheme.

Mr. Quay used the alias “Stephen Jameson” to hide his identity from potential victims as he was previously convicted of tax fraud in 2005, according to the statement. He also was found liable for securities fraud in an SEC enforcement action in 2012.