What is White Collar crime?
A former executive for a bankrupt Hallandale cash advance company has been charged with helping run a $322 million fraud on 3,600 investors in federal cases filed Thursday by the Securities and Exchange Commission and the Justice Department.
While the SEC and the U.S. Attorney for the Southern District of Florida make the same allegations about Alan Heide’s actions from 2014 through 2018, they want different consequences for the former 1 Global Capital chief financial officer.
The U.S. Attorney wants Heide’s time, as in up to five years of prison time. Heide’s been charged criminally with one count of conspiracy to commit securities fraud.
Prosecutors claim that fraud came in various forms of lies Heide told investors, from their investment being used solely to make short-term, merchant cash advance loans (sort of like Amscot for businesses) to 1 Global’s financial situation, even as it began to function like a Ponzi scheme. The scheme caused a shortfall that reached $50 million in June 2018 and was covered up by using new investor money to pay earlier investors, according to the court filing.
The information filing states, “Nonetheless, 1 Global continued to operate and raise money from new investors by using false and misleading statements as to its own financial condition and Heide and his conspirators continued to make false statements concerning the state of the investors’ investments.”
The SEC wants Heide’s money via a financial penalty. That regulatory agency charged Heide with violating anti-fraud sections of federal securities law by signing nine months of fraudulent account statements that gave investors a false sense of security about their investments.
“Heide’s misrepresentations gave false comfort to investors, allowing them to be duped to invest in 1 Global’s securities,” said a statement from Eric I. Bustillo, director of the SEC’s Miami regional office. “We allege that as 1 Global’s CFO, Heide played a significant role in 1 Global’s fraud by overstating the value of investors’ accounts and their rates of return and falsely representing the role of an auditor.”
Tuesday, the SEC gained a final judgment against 1 Global’s former CEO Carl Ruderman, which holds him liable for $32 million in fraudulently gained money and a $15 million civil penalty. Ruderman also has to turn over $750,000 in cash and 50 percent of the equity in his five-bedroom, 12-bathroom, 9,600-square-foot tower suite condominium at Aventura’s Bella Vista North, 20165 NE 39th Pl.
Ruderman hasn’t been charged criminally in federal court.