The owner of an Alpharetta-based financial firm who lives in Dawsonville has been charged by the U.S. Securities and Exchange Commission with operating a Ponzi scheme worth at least $25 million.
James G. Ossie, president of CRE Capital, is accused of taking millions from investors in a Japanese currency-trading scheme that guaranteed 10 percent returns every 30 days.
The complaint filed on Jan. 15 contends Ossie, 48, and the company claimed they could generate profits sufficient to pay the guaranteed returns by trading U.S. and Japanese currency.
According to the complaint, Ossie and CRE told investors the program involved little risk because CRE had an intensive reserve fund.
Ponzi schemes, illegal pyramid scams that essentially use money from new investors to pay off earlier investors, date back to the 1920s when Charles Ponzi defrauded thousands of New England residents through a postage stamp speculation scheme.
Ponzi told investors he could provide a 40 percent return in just 90 days compared with 5 percent for bank savings accounts by taking advantage of differences between U.S. and foreign currencies used to buy and sell international mail coupons.
The commission’s complaint alleges CRE and Ossie operated as a Ponzi scheme “at least as early as April 2008” by paying all returns to investors from funds generated by new investors.
The commission charged Ossie and CRE with four counts of fraud, including a count related to an offer to sell $100 million in company stock beginning in early 2009.
An emergency injunction to freeze assets and appoint a receiver to take control of the company was obtained last week.
Katherine Addleman, regional director of the SEC’s Atlanta Regional Office, said in a statement that the commission’s “emergency action in this case will protect investors from further harm - both those who have invested and need all remaining assets preserved as well as those who were contemplating an investment.”
She also reminded investors that if it seems to good to be true, it probably is.
“We also want to remind investors to be skeptical of promoters promising exorbitant returns,” Addleman said. “Such claims should be a red flag to investors.”
The commission’s investigation is ongoing. The Dawson County Sheriff’s Office has not had any contact with Ossie or the commission’s investigation, officials said
E-mail Michele Hester at firstname.lastname@example.org.