Lev Parnas – Recovery Fraudster Charged By The SEC (2023)
On May 6, 2022, the U.S. District Court for the Southern District of New York entered a partial consent judgment against Florida resident Lev Parnas for his role in participating in an offering fraud that raised millions of dollars from investors.
Lev Parnas & David Correia raised more than $2 million through “Fraud Guarantee”.
According to the SEC’s complaint, from 2013 through mid-2019, Parnas, along with David Correia, raised over $2 million from investors through investments in their entity, Fraud Guarantee. According to the complaint, Parnas and Correia told potential investors that their funds would be used to develop products that would help customers recoup losses resulting from investment or consumer fraud. The complaint further alleges that contrary to Parnas’s and Correia’s representations, the funds were instead largely used for personal expenses including travel, jewelry, cars, and disbursements at a casino.
As alleged, Parnas and Correia also falsely told potential investors that they had raised millions of dollars from other investors and that they had invested hundreds of thousands of dollars of their own money into Fraud Guarantee.
Lev Parnas, an American citizen who was born in Ukraine and made news in 2019 for Lev Parnas’s suspected involvement in the controversy involving Ukraine that led to the impeachment of Donald Trump for his role in the scandal, was born in Ukraine. Now, Lev Parnas is once again making headlines, this time for his alleged involvement in a scheme to commit recovery fraud, which has resulted in charges being brought against him by the Securities and Exchange Commission (SEC).
Who exactly is this Lev Parnas?
Rudy Giuliani was the former mayor of New York City and is now President Trump’s personal lawyer. Lev Parnas was an associate of Rudy Giuliani during his time in that role. The year 1976 marked Parnas’ arrival in the United States from his birthplace in Ukraine. He has been involved in a number of different business projects, some of which include a hedge fund and an energy company.
The Charges or Accusations
The Securities and Exchange Commission (SEC) asserts that Parnas was complicit in a scheme to deceive investors by exaggerating the potential benefits of a particular investment opportunity. It is alleged that Parnas and the other defendants made a guarantee to investors that the money they invested would be utilized to purchase and resell discounted consumer loan portfolios.
However, according to the SEC’s allegations, the defendants did not purchase any debt portfolios but rather diverted the money from the investors for their own personal purposes, such as the purchase of luxury vehicles, payment of credit card bills, and vacations. In addition, the defendants are accused of fabricating documentation in order to give the impression that the debt portfolios had been bought and sold multiple times.
The claims that were made against Parnas and the other defendants, in this case, have had a profound impact on the repercussions. They are currently facing possible jail as well as penalties and restitution if they are found guilty of the charges brought against them by the SEC.
This case has also brought to light the necessity of elevating the level of education and awareness among investors regarding the dangers involved with engaging in fraudulent schemes. When considering various investment prospects, investors need to exercise extreme caution, and before to making any investments, they should carry out an extensive background investigation.
The Court entered a partial final judgment against Parnas by consent, permanently enjoining him from violating the antifraud provisions 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. On May 9, 2022, the Commission imposed an associational and penny stock bar on Parnas. Previously, in April 2021, the Commission settled its case with Correia.
The SEC’s investigation was conducted by Lindsay Moilanen, Jordan Baker, and Sheldon L. Pollock of the New York Regional Office, and the litigation is being led by Lee A. Greenwood and Ms. Moilanen. The case is being supervised by Mr. Pollock.
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