Allegations include the misappropriation of more than $2.6 million, much of it through a penny stock scheme
Elder financial fraud continues to be a serious problem in the U.S., but the Securities and Exchange Commission (SEC) is making attempts to protect senior investors. One way the agency is doing this is by increasing penalties for repeat offenders.
Recently, the SEC charged Joseph A. Rubbo and Angela Beckcom Rubbo Monaco of Coral Springs, FL, with defrauding 11 investors, most of whom were elderly. Their penny stock scheme involved getting people to invest in Rubbo and Monaco’s entertainment company called “VIP,” as well as the Spongebuddy, a sponge/glove cleaning product.
Steven Dykes was hired by Rubbo and Monaco to make cold calls and pitch investments. Allegedly, Dykes told at least one investor that both the Starz cable network and Pandora Radio were interested in possibly buying VIP. That same investor was also allegedly told that Shark Tank would be featuring the Spongebuddy and it would also be for sale on QVC.
Overall, Rubbo and Monaco raised around $5.4 million. According to the SEC, the two misappropriated over $2.6 million and used it to pay for their personal expenses, including credit card bills and a down payment on a luxury car. They also gave money to relatives. An undisclosed amount went to Dykes in the form of sales commissions.
“Rubbo and Monaco defrauded investors by stealing millions of dollars from elderly investors which they spent on themselves and their family members instead of investing in their businesses,” said Steven Peikin, co-director of the SEC’s Enforcement Division.
Rubbo, Monaco, and Dykes are not registered with the SEC, nor were they during the time period they allegedly perpetrated this scheme. Even so, the SEC is now charging Rubbo and Monaco with several violations related to the Securities Act and the Exchange Act. Dykes has been charged with violating the broker-dealer provisions in the Exchange Act. In addition to the return of the defendant’s money, the SEC is also seeking monetary penalties and a permanent injunction.
One of the reasons why the SEC is going after Rubbo and Monaco so strongly is because they’ve been in trouble before. In 2003, Rubbo pled guilty to money laundering and racketeering. He received a sentence of 52 months in jail.
As part of the SEC’s initiative to crack down on repeat offenders, their regional office in Miami has brought charges against 23 people so far. Nine of them are now also facing criminal charges. The agency is making a point to be more aggressive about going after shysters “who don’t learn their lesson the first time around,” said Eric Bustillo, regional SEC director.
The Silver Law Group is also looking into the many allegations against Rubbo, Monaco, and Dykes. If you were an investor in this reported scheme, contact our office. We can help you get the information you need and discuss whether there are additional steps to take. To speak to an elder financial fraud attorney, call us toll-free at 800-975-4345 or just send us a message through our online form.