The latest charged in a $322 million fraud: a Miami Beach accountant, a Plantation broker
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The 1 Global Capital Fraud
What was sold as a boost for small businesses and an opportunity for mom-and-pop investors turned out to be a massive scam involving financial thugs throughout the Miami-Fort Lauderdale metropolitan area.
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The gang of former 1 Global Capital executives or employees charged criminally or civilly in the $322 million fraud grew by two on Monday when the Securities and Exchange Commission filed in Miami federal court against former chief financial officer Eric Alexander and director of business development Scott Merkelson.
Each is charged civilly with six counts of securities fraud.
“Without admitting or denying the SEC’s allegations, Alexander and Merkelson each consented to a permanent injunction, a $100,000 civil penalty and an officer and director bar,” the SEC announced. “The settlements are subject to Court approval.”
The SEC and U.S. Department of Justice have been hauling the people parts of this fraud into court since 2019, trying to exact consequences of money and/or prison time after 3,600 investors in 42 states got fleeced.
What they thought they were putting their money into: a company making short-term, cash advance loans — merchant cash advances or MCAs — to businesses that couldn’t get bank loans, sort of an Amscot for small businesses.
What their money actually funded, according to the SEC complaint (and earlier guilty pleas): “In reality, the company used substantial investor funds for purposes other than the MCAs, including paying operating expenses and funding the luxury lifestyle of its founder, Chairman and CEO Carl Ruderman.”
The SEC said Alexander, a 42-year-old Miami Beach resident and Wisconsin-licensed certified public accountant, “helped the Company raise funds from investors by manipulating 1 Global’s management fees to artificially increase or decrease the investors’ rate of return depicted on investors’ monthly account statements...”
Alexander is also accused of lying that the Daszkal Bolton firm acted as an independent auditor of 1 Global’s way of figuring investor returns then Daszkal Bolton did no such thing.
Then, Merkelson, a 44-year-old Plantation securities broker, “helped perpetuate the fraud by signing the monthly account statements that inaccurately represented investors’ rates of return,” the SEC complaint said. “Merkelson knew [1 Global] and sales agents used sample statements to solicit new investors.”
