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SEC Charges 54Freedom, Inc. with Securities Fraud

The Securities and Exchange Commission (SEC) had announced it has charged two individuals and eight companies with fraud in relation to company securities and what was described as “charitable gift annuities.” The complaint was filed in the U.S. district court in Syracuse, New York.

Allegations of Investment Fraud

One of the defendants is James P. Griffin, the founder and Chief Executive Officer (CEO) of 54Freedom Inc. (54Freedom). Both Griffin and the company are located in Cazenovia, New York. 54Freedom was initially formed to sell insurance products to Americans with disabilities. However, after several years, the defendants changed the company’s purported business plan to focus on the sale of its charitable gift annuities. Throughout the company’s existence, the SEC claims the defendants provided unrealistic financial projections to prospective investors.

Also named as a defendant is James Wolle, who is the Chief Financial Officer (CFO) and Treasurer of 54Freedom. The other defendants include the following:

  • 54Freedom Securities Inc.
  • MoneyIns Inc.
  • 54Freedom Foundation Inc.
  • 5 Ledyard Ave. LLC
  • 5 Ledyard Corp.
  • IICNet LLC
  • 54FreedomTele Inc.

The complaint alleges the defendants engaged in a scheme that raised over $8 million from at least 125 investors through the sale of shares and unregistered promissory notes issued by the companies. The scheme is alleged to have lasted over seven years, beginning in 2007. Specifically, the SEC claims that Griffin and Wolle misled prospective investors in regards to the prospects of the companies. For example, it is alleged that the defendants falsely claimed that they had an exclusive relationship with Lloyd’s of London and that they would publish a soccer book affiliated with the “Chicken Soup for the Soul” series.

Further, Griffin is alleged to have sold what were described as charitable gift annuities, which he falsely claimed were backed by reputable insurance companies. Griffin is also alleged to have diverted $1.2 million in investor funds to pay for corporate and personal expenses including the purchase of a boat and trips to Hawaii and New Zealand for Griffin and his wife, Chary Griffin.

The SEC claims that these actions violated antifraud and registration provisions of the securities laws. Chary Griffin is also named as a relief defendant in order to recover allegedly misappropriated investor funds. In addition, Mr. Griffin faces parallel criminal charges brought by the U.S. Attorney’s Office for the Northern District of New York. The criminal charges include fraud and money laundering in relation to the charitable gift annuities.

Andrew M. Calamari, the Director of the SEC’s New York Regional Office, stated, “[w]e allege that Griffin and Wolle picked numbers out of thin air and even guaranteed projections to purchasers of the securities while taking undisclosed sums for themselves.”

Protection for Investors

For investors harmed by such misconduct, legal action may be possible to help recover investment losses. If you would like more information about the legal remedies available to harmed investors, speak with experienced securities law attorney today. At the Silver Law Group, we proudly provide our specialized knowledge to help harmed investors.

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