Two Florida residents and their company were charged in Ohio with raising nearly $15 million in a Ponzi scheme.
Lakeland, Fla., residents Edward A. Allen and David L. Olson, and their company, A&O Investments LLC, were accused by the Securities and Exchange Commission of raising about $14.8 million from at least 100 investors between September 2005 and December 2008. The charges were filed in U.S. District Court for the Northern District of Ohio.
The SEC filed a civil injunctive action against the men and their company, saying they “told investors that they would use the investors' money to purchase, rehabilitate, and sell real estate” while promising annual returns of 20%.
Only $5.1 million of the money raised was used to purchase and rehabilitate real estate, the SEC alleges, with $2.2 million going toward personal expenses.
The men recruited investors from World Group Securities Inc., a broker-dealer for which they were registered representatives. Mr. Olson worked out of the Boardman, Ohio, office from April 2002 to September 2007, the SEC said, and both he and Mr. Allen allegedly “created the impression that they were still affiliated with WGS,” giving the investors more confidence in the “legitimacy of the A&O promissory note offering.”
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