The Securities and Exchange Commission has alleged that a Charlottesville resident, John Donnelly and his companies (Tower Analysis, Inc., Nasco Tang Corp., and Nadia Capital Corp.) are “conducting a multi-million dollar Ponzi scheme. The Commission also filed an application for an ex parte temporary restraining order, asset freeze, and other emergency relief against Donnelly and his entities.”
The allegation states that since 1998 at least $11 million has been taken from 31 individuals who were sold investments in various funds. According to the complaint, despite representations to investors that he had generated annual returns of as much as 22%, Donnelly has done almost no securities trading, and none since 2002. The complaint alleges that instead of using investor funds to execute trades, Donnelly used investor funds to repay other investors, and paid himself approximately $1 million in salary and fees during the last three years alone.
A ponzi scheme is a fraudulent investment operation that pays returns to investors from their own money or money paid by subsequent investors rather than from profit.
Updates will follow as we learn more…Please let us know if you have any details.
Full allegation after the break…
U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20941 / March 11, 2009
SEC v. John M. Donnelly, et al., United States District Court for the Western District of Virginia (Civil Action No. 3:09CV0015) (March 11, 2009)
SEC Charges John Donnelly, Tower Analysis, Inc., Nasco Tang Corp., and Nadia Capital Corp. With Operating a Multi-Million Dollar Ponzi Scheme and Obtains Temporary Restraining Order and Order Freezing Assets
The Securities and Exchange Commission filed a complaint today in the United States District Court for the Western District of Virginia against John M. Donnelly (Donnelly), a resident of Charlottesville, Virginia, and his firms, Tower Analysis, Inc., Nasco Tang Corp., and Nadia Capital Corp., alleging that they are conducting a multi-million dollar Ponzi scheme. The Commission also filed an application for an ex parte temporary restraining order, asset freeze, and other emergency relief against Donnelly and his entities.
According to the Commission’s complaint, from at least 1998, Donnelly fraudulently obtained at least $11 million from as many as 31 investors through the sale of securities in the form of limited partnership interests in three investment funds. The SEC alleges that Donnelly orchestrated the scheme through three entities, Tower Analysis Inc., Nasco Tang Corp., and Nadia Capital Corp. The complaint alleges that Donnelly told investors that he would pool their funds to invest in, among other things, stock and bond index derivatives. According to the complaint, despite representations to investors that he had generated annual returns of as much as 22%, Donnelly has done almost no securities trading, and none since 2002. The complaint alleges that instead of using investor funds to execute trades, Donnelly used investor funds to repay other investors, and paid himself approximately $1 million in salary and fees during the last three years alone. The complaint also alleges that Donnelly has been soliciting investors for a new fund called Nadia Capital Partners, LP based on misrepresentations about his past trading results.
On the Commission’s application, the court today entered a temporary restraining order enjoining Donnelly, Tower Analysis, Nasco Tang, and Nadia Capital from future violations of Section 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. In addition, the court entered an order freezing all assets under the control of Donnelly and his firms.
The Commission acknowledges the assistance of the U.S. Attorney’s Office for the Western District of Virginia and the Federal Bureau of Investigation in bringing this action. The U.S. Commodity Futures Trading Commission has filed a parallel action concerning Donnelly.
[full SEC Restraining Order & Asset Freeze here]
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o m g…and we all thought cville was safe from financial tyranny, run for the hills
Was the Crapshawvian master overlord involved?
big big props to the birdie that sent this in.. we owe you!
/scooped.
well if the average amount was $300,000 that leaves a few number of people in cville who could be involved.
I suspect there will be a few more…
Time for Johnny boy to change his “linked in” profile to a “locked in” profile…
linkage?
Nope. Been looking for Johnny on the tubes for shooping and raiding hilarity, but when I make him googly, only his investigation pops up. Why would you invest delicious cake in a Corp or an Inc that has no website?
And.. “Nasco Tang”? Seriously?
I think I might grow a mustache, buy a sleeveless denim jacket, some turquoise jewelry, and change my name to Nasco Tang.
Interesting Links (can’t figure out if this is the same guy or not)…
Seems to be/was a motorcycle enthusiast/racer?
http://www.cmraracing.com/2002web/98results/event9/6egr.txt
http://venus.13x.com/roadracingworld/scripts/NewsInsert.asp?insert=2646
Motorcycle team name? Army of Darkness.
http://www.armyofdarkness.com/index.htm
Interviewed by some SNL folks about business stuff:
http://www.secinfo.com/dsVsf.z853.d.htm
@8:
That cat Nasco Tang was a bad mutha…
Shut yo mouth.
Just talkin about Nasco Tang.
/sorry, before everyone’s time…?
It might have gotten posted here first but the Hook got the story
http://www.readthehook.com/blog/index.php/2009/03/11/madoff-lite-feds-claim-charlottesville-ponzi-scheme/
@11 – what .. they googled the same stuff we did and called his house?
/go journalism!!!!!
Don’t be bitter Thor- the Hook got where he lived, where he worked, who he’s married to, when he graduated from UVa and a picture of his office with quotes from people who knew him. Reading something posted on a government website and commenting is blogging. All the other factual stuff that wasn’t in the indictment- that’s journalism.
Bitter is my middle name
@12: you bettah sine that putty on the runny kine
i’d have to say dah-nay-no to Nasco Tang, wah-da-tah
@14: Why you hat-in? That’s their JOB. They investigate and get the story. we’z just bloggers. drunk bloggers as it be
PS i love you all. ‘cept orchid who is a whore. g’night!
A special after midnight visit for Shenanigans, happy birthday and may you have a gentle hangover this AM.
blurg
@19: A little drunk last night?
I’m still trying to wrap my mind around anyone who would invest literally everything they own on one person or company. I have a few gum wrappers lying around and 1 penny that I found under the couch w/ fuzz on it and I wouldn’t bet those on one person or one stock. These are nominally intelligent people I would assume with the huge bankrolls and really? Don’t they read MSN Money? This isn’t complex. Barnum was so correct.
I wish I had the gene that could be callous and a sociopath for a few days because I could scam the crap out of people. I would give it back and then dope slap them for being dumb. W/ a 10 percent interest rate.
I mostly feel that we’re just walking slightly outside of reality and everything is …eventual. These are good times for the survivors of the world. The ones who recognize beauty in the most inane things and humor in everything. Sermons in Stones. I don’t have a fear. They have been broken down into annoyances.
Like catchphrases. “In this market” …..Wow! You sold your house “in this market” ….my response in my head is “wow, you’re so stupid to listen to the drumbeat of the Chicken Little Media and 24/7 Nancy Grace journalism” …
The one who wants to not beat people up and quash their little ego invariably replies ‘GEE, yeah THANKS.. I can’t believe I sold my house IN THIS MARKET (stfu ya dumbass)”
Don’t put all of your money in with one guy. I gamble (in theory) and you’ve got to know when to hold em. Or fold em or something like that.
@ 23 You hit it on the nose.
@14 So the difference is Thor googled him and they Facebooked him. Potato, potato. Hmm…Looks the same on the interwebs…
This six part series by an excellent fiduciary financial planner in the same city talks about how to safeguard your money against this type of fraud. It is a really good list of what to insist on.
Check out Safeguarding Your Money at
http://www.emarotta.com/article.php?ID=319
ow to safeguard your money against this type of fraud
Step One: Have some money.
…aaaand I’m out.