Florida man targeted church members with Ponzi scheme: SEC

A Florida man has been charged with orchestrating a $35 million Ponzi scheme that targeted elderly church members in what the United States Securities and Exchange Commission is classifying as an example of affinity fraud.

A statement from the U.S. Securities and Exchange Commission, released Thursday, announced the charging of Brent Seaman, a resident of Naples, Florida, with “fraudulently raising approximately $35 million from at least 60 investors through an unregistered securities offering.” The SEC noted that “many of these investors were elderly, retired, and connected to a Naples church where Seaman was an active member.”

The charges against Seaman followed an investigation spearheaded by the SEC’s Miami Regional Office’s Fraud Against Minority Groups Initiative into actions that took place between June 2019 and September 2022. A complaint filed by the SEC in the U.S. District Court for the Southern District of Florida reveals how Seaman told people he would use their money to invest in technology companies in addition to trading currencies and commodities, promising annual returns ranging from 18% to 48%.

While Seaman vowed that his investments were “safe” and brought “guaranteed” returns, the SEC determined that his business endeavors resulted in the loss of millions of dollars and that “his currency trading was always unprofitable.”

According to the SEC, “Seaman also allegedly misappropriated millions of dollars for himself, in part to purchase luxury automobiles and to pay for trips on private planes. Finally, Seaman allegedly made Ponzi-like payments to investors because he did not generate profits in connection with his trading sufficient to pay investors their required monthly distributions.”

“As alleged in our complaint, Seaman targeted church members with false claims of success,” stated Eric Bustillo, the director of the SEC’s Miami Regional Office. He described the charges against Seaman as evidence of his agency’s “deep commitment to pursue those who prey on vulnerable investors.”

In addition to Seaman, the SEC complaint charges Accanito Holdings, LLC, Accanito Equity, LLC, Accanito Equity II, LLC, Accanito Equity III, LLC, and Accanito Equity IV, LLC with violating the registration provisions of Section 5 of the Securities Act of 1933. The defendants, along with Accanito Capital Group LLC and Surge LLC, stand accused of violating antifraud provisions of the Securities Exchange Act of 1934. The SEC also charged Seaman with violating the broker-dealer registrations of Section 15(a) of the Exchange Act.

As part of the scheme, Seaman’s wife, Jana, as well as Valo Holdings Group, LLC and Surge Capital Ventures, LLC received millions of dollars from the deceived investors. A settlement reached with the defendants involves Jana Seaman paying back $757,154 of money obtained under false pretenses, while Valo Holdings Group will pay back $668,240. The defendants have neither admitted nor denied the SEC’s allegations.

The SEC’s statement announcing the charges against Seaman and associated individuals and organizations concluded with a link to the SEC website’s description of affinity fraud. The SEC defines affinity fraud as “a type of investment scam that preys upon members of identifiable groups, such as religious or ethnic communities or the elderly.”

As the SEC explained, “Affinity fraud almost always involves either a fake investment or an investment where the fraudster lies about important details (such as the risk of loss, the track record of the investment, or the background of the promoter of the scheme).” In many examples of affinity fraud, “money given to the promoter by new investors is paid to earlier investors to create the illusion that the so-called investment is successful.”

“This tricks new investors into investing in the scheme, and lulls existing investors into believing their investments are safe. In reality, even if there really is an actual investment, the investment typically makes little or no profit. The fraudster simply takes new investors’ money for the fraudster’s own personal use, often using some of it to pay off existing investors who may be growing suspicious.” 

The SEC outlined how “eventually, when the supply of investor money dries up and current investors demand to be paid, the scheme collapses and investors discover that most or all of their money is gone.”

Affinity fraud schemes often involve the fraudsters using their authentic or pretend membership in a community, such as a religious group, to convince members “to trust them with the group’s hard-earned savings.” The SEC noted that “at its core, affinity fraud exploits the trust and friendship that exist in groups of people who have something in common.”

The SEC advises potential investors to research a person’s background before agreeing to do business with them to avoid falling victim to affinity fraud. It also warns against falling for claims that sound too good to be true, citing “promises of quick and high profits, with little or no risk” as “classic warning signs of fraud,” along with investment opportunities touted as “once-in-a-lifetime.”

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