SEC and U.S. Attorney Charge Miami Investment Advisor in Ponzi Scheme Targeting Retired Public Sector Employees

The U.S. Securities and Exchange Commission (SEC) and the U.S. Attorney’s Office for the Southern District of Florida have each charged Miami-based investment advisor Phil Donnahue Williamson for his alleged role in a $2,000,000 Ponzi scheme that defrauded hundreds of retired public sector workers, including school teachers and law enforcement agents.

According to the SEC and U.S. Attorney’s Office, Williamson operated his scheme through two businesses — Sterling Investment Fund LLC and Sterling Financial Partners — that allegedly invested in distressed properties in Florida and Georgia.  Between 2007 and 2014, Williamson advised the investors that they would be placing their retirement savings in the distressed properties; and he was able to raise more than $2 million.  Some of the investors were former clients of Williamson’s, some were referred by a former co-worker of his, and some approached him after he spoke at financial seminars hosted by churches.  The investors allegedly wanted to safely invest their funds and keep those funds liquid, which Williamson purportedly said they could do in his “no-risk” investment strategy that would provide them yearly returns of 8 to 12 percent.

As detailed in the SEC’s lawsuit, the investors all agreed to pay Sterling a $25,000 membership subscription and signed documents allowing a trust company to rollover their retirement accounts.  Without realizing it, though, the investors also authorized Williamson to deduct advisory fees; and he allegedly utilized that mechanism to siphon nearly $750,000 in fees from the investors.  According to reports, Williamson used the stolen funds to pay for his children’s school tuition, his mortgage, car payments, and to fund his other businesses along with making supposed distribution returns to investors.

“Investors entrusted him with their retirement savings, and he spent it as his own money,” said Eric I. Bustillo, Director of the SEC’s Miami Regional Office.

Williamson voluntarily surrendered to federal law enforcement authorities and has agreed to settle the charges of defrauding the investors and stealing their money.  Notwithstanding his willingness to cooperate, the possibility remains that Williamson will face a prison sentence for his wrongdoing.  Soliciting investors from churches and other places of worship is frequently referred to as affinity fraud where the perpetrator earns the investors trust preying on the commonality between the investor and con artist.

Silver Law Group has successfully recovered multi-million dollar awards for its clients in a wide variety of fraud cases throughout the country and abroad.  If you have questions about your legal rights, or have been the victim of fraud or misleading sales pitches attempting to convince you to invest your retirement funds, contact Scott L. Silver to discuss your legal matter in a free consultation.  CONTACT: Silver Law Group, 11780 W. Sample Road, Coral Springs, FL 33065; Telephone: (800) 975-4345 (Toll Free); Web site: www.silverlaw.com; E-mail: ssilver@silverlaw.com.