In another promissory-note crackdown, the SEC filed charges against AIC, Inc. last week for an alleged multi-million dollar offering fraud and Ponzi scheme. Also named in the complaint were Nicholas D. Skaltsounis, President and CEO of AIC; Community Bankers Securities, LLC ("CB Securities"), an AIC subsidiary; stockbroker John B. Guyette, of Greeley, Colorado; and registered investment adviser John R. Graves, of Pensacola, Florida.
According to the SEC, from at least January 2006 through November 2009, the defendants offered and sold more than $7.7 million in AIC promissory notes and stock to at least 74 investors scattered across 14 states. The SEC also claims that many of the defrauded investors were "elderly, unsophisticated brokerage customers of CB Securities."
In the complaint, the SEC alleges that the defendants promised potential investors interest and dividends ranging from 9 to 12.5 percent on the AIC promissory notes and stock, even though the defendants knew that AIC and its subsidiaries had never been profitable and would, thus, be unable to offer such returns. Skaltsounis is also accused of using new investor funds to make Ponzi-style payments to older investors. Skaltsounis, Guyette, and Graves are all accused of misrepresentation and the omission of material facts.
According to the SEC's litigation release, the Commission is seeking permanent injunctions and civil penalties against the defendants. Disgorgement is also being sought against all of the defendants except Graves, who is charged with violating the Investment Advisers Act of 1940.