Tuesday, January 11, 2011
NJ Attorney General Files Suit Against Carr Miller Capital
The Office of the Attorney General of New Jersey and the Bureau of Securities has filed suit against Carr Miller Capital LLC of Marlton and its three principals for their alleged use of a Ponzi scheme and other means to defraud investors of over $40 million.
Everett Charles Ford Miller, 41, president of Carr Miller Capital, and Ryan Jude Carr, 34, and Brian Patrick Carr, 39, cousins and employees of Carr Miller Capital, are named as defendants in the state’s nine-count Complaint. The lawsuit, filed in Superior Court in Newark, alleges that the defendants violated numerous New Jersey Uniform Securities Laws by committing fraud, commingling funds, and selling unregistered securities.
Judge Kenneth Levy on Monday approved the freezing of assets held by Miller and his related companies, and the appointment of a receiver who will oversee and control those assets. The judge also approved the appointment of a fiscal monitor for the Carrs, and one nominal defendant. Their assets cannot be moved or transferred without the approval of the fiscal monitor.
The state’s complaint seeks restitution for investors, disgorgement of profits, and the imposition of civil penalties.
In a related action, the Bureau of Securities has revoked the Investment Advisor registrations and/or exemptions of Carr Miller Capital, Capital Markets Advisory, LLC, Miller, Brian Carr and Ryan Carr, effectively barring them from the state’s securities industry.
“We charge that these defendants operated a Ponzi scheme for their own enrichment at the expense of investors,” Attorney General Paula Dow said. “Instead of investing funds to produce high rates of return as promised, we allege that the defendants spent investors’ hard-earned money on personal luxuries and indulgences.”
As detailed in the first four counts of the state’s Complaint, the defendants made false statements and omitted materials facts when dealing with investors and also deployed invested funds for unauthorized uses.
The Bureau’s investigation revealed that $13.5 million of investors’ monies were used to pay for a New Jersey Devils sky box at the Prudential Center in Newark, personal automobile purchases, travel and luxury vacations, retail purchases and meals, among other things. An additional $16 million was put into various hedge funds, real estate, film production companies, and an oil and gas venture, among other ventures not authorized by or disclosed to investors.
Carr Miller Capital offered nine-month notes that purportedly provided rates of return between 10% and 15% annually. Certain investors were told they could renew the notes for additional nine-month terms or be paid out at the end of the term. Approximately $8 million of the $40 million was sent to investors as “interest” payments, when, in fact, they were merely new investors’ capital being used to keep the Ponzi scheme in operation.
“These defendants operated a classic Ponzi scheme, using funds from new investors to pay money to earlier investors, all in an attempt to perpetuate the deception,” said Thomas R. Calcagni, Acting Director of the Division of Consumer Affairs. “The promised rates of return sounded too good to be true and, sadly, that turned out to be the case.”
The securities offered by the defendants were not registered for sale in New Jersey and Ryan Miller was not registered to act as an agent, as alleged in Counts V and VI of the state’s Complaint.
“Unregistered investments and unregistered individuals should be an immediate red flag to potential investors,” said Marc B. Minor, chief of the N.J. Bureau of Securities. “The Bureau is a resource that investors can use to perform due diligence as they decide how and with whom to invest.”
If you purchased Carr Miller Capital promissory notes, contact Baker & Slaughter, P.A. at 910-762-3000 for a complementary review of your case and assistance in recovering your investment.
Everett Charles Ford Miller, 41, president of Carr Miller Capital, and Ryan Jude Carr, 34, and Brian Patrick Carr, 39, cousins and employees of Carr Miller Capital, are named as defendants in the state’s nine-count Complaint. The lawsuit, filed in Superior Court in Newark, alleges that the defendants violated numerous New Jersey Uniform Securities Laws by committing fraud, commingling funds, and selling unregistered securities.
Judge Kenneth Levy on Monday approved the freezing of assets held by Miller and his related companies, and the appointment of a receiver who will oversee and control those assets. The judge also approved the appointment of a fiscal monitor for the Carrs, and one nominal defendant. Their assets cannot be moved or transferred without the approval of the fiscal monitor.
The state’s complaint seeks restitution for investors, disgorgement of profits, and the imposition of civil penalties.
In a related action, the Bureau of Securities has revoked the Investment Advisor registrations and/or exemptions of Carr Miller Capital, Capital Markets Advisory, LLC, Miller, Brian Carr and Ryan Carr, effectively barring them from the state’s securities industry.
“We charge that these defendants operated a Ponzi scheme for their own enrichment at the expense of investors,” Attorney General Paula Dow said. “Instead of investing funds to produce high rates of return as promised, we allege that the defendants spent investors’ hard-earned money on personal luxuries and indulgences.”
As detailed in the first four counts of the state’s Complaint, the defendants made false statements and omitted materials facts when dealing with investors and also deployed invested funds for unauthorized uses.
The Bureau’s investigation revealed that $13.5 million of investors’ monies were used to pay for a New Jersey Devils sky box at the Prudential Center in Newark, personal automobile purchases, travel and luxury vacations, retail purchases and meals, among other things. An additional $16 million was put into various hedge funds, real estate, film production companies, and an oil and gas venture, among other ventures not authorized by or disclosed to investors.
Carr Miller Capital offered nine-month notes that purportedly provided rates of return between 10% and 15% annually. Certain investors were told they could renew the notes for additional nine-month terms or be paid out at the end of the term. Approximately $8 million of the $40 million was sent to investors as “interest” payments, when, in fact, they were merely new investors’ capital being used to keep the Ponzi scheme in operation.
“These defendants operated a classic Ponzi scheme, using funds from new investors to pay money to earlier investors, all in an attempt to perpetuate the deception,” said Thomas R. Calcagni, Acting Director of the Division of Consumer Affairs. “The promised rates of return sounded too good to be true and, sadly, that turned out to be the case.”
The securities offered by the defendants were not registered for sale in New Jersey and Ryan Miller was not registered to act as an agent, as alleged in Counts V and VI of the state’s Complaint.
“Unregistered investments and unregistered individuals should be an immediate red flag to potential investors,” said Marc B. Minor, chief of the N.J. Bureau of Securities. “The Bureau is a resource that investors can use to perform due diligence as they decide how and with whom to invest.”
If you purchased Carr Miller Capital promissory notes, contact Baker & Slaughter, P.A. at 910-762-3000 for a complementary review of your case and assistance in recovering your investment.
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