The U.S. Securities and Exchange Commission seized the assets of two men who posed as pastors in order to defraud investors in a $25 million Ponzi scheme.
Facts of the Case
David Lee Parrish and Kent R.E. Whitney, who held themselves out as pastors at the Church of Healthy Self, located in a California strip mall, brought in hundreds of thousands of dollars of funds from investors since early March.
On March 12, the FBI seized the funds from the church's asset management accounts. However, that did not stop Parrish and Whitney from continuing to solicit money from investors. As a result, the court ordered temporary restraining orders and asset freezes.
Soon afterwards, the SEC filed its own suit against Parrish and Whitney.
Who Are Whitney and Parrish?
According to the SEC report, Whitney previously had been in prison from 2001 to 2014 for wire fraud. He became an online minister and used those credentials to form the Church of Healthy Self, a nonprofit religious organization. Whitney consented to having his own assets frozen in late March.
Parrish previously had received two six-month trading suspensions for placing option orders in Whitney's wire fraud scheme. Last year, he decided to work with Whitney again and became director and so-called pastor of the Church of Healthy Self investment fund.
What Was the Scheme?
Parrish and Whitney through online advertisements like Youtube, on television, and radio promised investors a 12 percent annual tax-deductible return that was insured by the FDIC with little to no risk. They claimed that a portion of the investments would go to various charities.
Through these false and misleading statements, the two raised $25 million from investors. They used $21 million pay off some investors and for their own personal expenses.
As part of the SEC's preliminary injunction, Parrish and Whitney were required to surrender all documents pertaining to the asset management company, including statements from investor accounts, and were prohibited from destroying any documents.
Speak with a Ponzi Scheme Attorney
Our AV-rated* lawyers have extensive experience litigating a broad range of investment disputes, including those involving Ponzi Schemes.
If you are looking for an attorney to review your rights and options, the Ponzi scheme lawyers at Dimond Kaplan & Rothstein, P.A. represent individual and institutional investors who have lost money as a result of broker misconduct and Ponzi schemes.