The Securities & Exchange Commission (SEC) has filed suit against an Oregon-based company, alleging that its executives transformed the company into a $350 million Ponzi scheme after investing in the now-bankrupt Corinthian Colleges.

Aequitas Management LLC and several of its affiliates, along with three top executives of the company, are accused of operating a Ponzi scheme by using investment funds raised through promissory notes issued through Aequitas Commercial Finance LLC (ACF) to pay previous investors after the for-profit college defaulted on its obligations to ACF.

According to the SEC, Aequitas’ top brass knew that the company was suffering from severe cash flow shortages and that investor money was being used improperly. The SEC states that Aequitas raised funds by issuing promissory notes through ACF and other Aequitas investment funds, telling investors that their money was invested in a diverse portfolio of receivables ranging from health care to transportation and education, among others.

Corinthian Colleges began defaulting on payments in June 2014 and filed for bankruptcy in May 2015 after federal regulators accused it of misleading students about job placement rates. To cover for Corinthian’s shortfall, Aequitas CEO, Robert Jesenik, and chief fundraiser, Brian Oliver, decided to raise funds from new investors and convince prior investors to reinvest. In the meantime, top executives continued to enjoy perks including private jet use, dinners, and other outings, in addition to their lucrative salaries.

Were You a Victim of a Ponzi Scheme?

Dimond Kaplan & Rothstein, P.A. attorneys have recovered more than $100 million from banks and brokerage firms for their wrongful actions. If you invested with Aequitas Management, Aequitas Commercial Finance, or any of their subsidiaries, you may have certain legal rights that require your immediate attention. Contact us to schedule an appointment or consultation today.

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