The Securities and Exchange Commission today charged an Irvine, Calif., attorney and two other promoters for conducting a $52.7 million Ponzi scheme in which they sold investors bogus PIPE (private investment in public equity) investments, promised unrealistic profits, and misappropriated more than $20 million of investors’ funds to function as their own personal piggy bank.
The SEC’s complaint alleges that attorney Jeanne M. Rowzee along with James R. Halstead of Santa Ana, Calif., and Robert T. Harvey of Prosper, Texas, told investors that Rowzee was an experienced securities attorney who personally screened and selected each PIPE investment after thorough due diligence. Contrary to these representations, they did not place investor funds in PIPE investments. Rowzee, Halstead, and Harvey instead used new investor funds to pay principal and returns to earlier investors, and to finance their own personal endeavors such as trips to Las Vegas, property purchases, and alimony payments.
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