Two men must disgorge more than $766,000 in ill-gotten gains for their roles in the $8.6 million Ponzi scheme launched by David Allen, co-founder and CFO of China Voice Holding Corp., in 2008.
According to a 2011 SEC Complaint, Allen operated the ongoing, multi-million-dollar Ponzi scheme by “creating and funneling money through a complicated web of at least 28 companies and other entities” that were under his control.
“David Ronald Allen, who also was China Voice's chief financial officer, and his associates Alex Dowlatshahi and Christopher Mills promised investors in a series of offerings of limited partnerships that they would earn returns of at least 25 percent on their investments,” wrote the SEC in April 2011. “Investors were falsely told that their money would be loaned to companies with a demonstrated track record and large profit margins. Instead, Allen and his cohorts used investor funds to pay back investors in earlier partnerships and funneled investor money to China Voice and a complicated web of other companies that Allen controls. Allen and his associates also siphoned investor money to enrich themselves and family members.”
Allen and China Voice settled with the SEC in Dec. 2011, and agreed to pay hundreds of thousands of dollars in disgorgement, prejudgment interest, and civil penalties.
"Such cooperation does not change the fact that defendants participated in a fraudulent scheme and misled investors, resulting in the substantial loss or risk of substantial loss of investor funds," wrote O’Conner.
To learn more about the case, read the April 2011 SEC Complaint here.