Charlotte businessman ran a $7 million Ponzi scheme, SEC says
A Charlotte businessman has been accused of operating a $7 million Ponzi scheme and defrauding dozens of local investors to fund his ‘lavish lifestyle‘, the Securities and Exchange has said. Commission in new court documents.
Wynn Charlebois, a ‘self-proclaimed business consultant’, defrauded at least 75 investors out of millions of dollars through his company, WC Private LLC, and ‘multiple bogus investment opportunities’, the agency says in a Friday press release.
The SEC filed an emergency action Thursday in the U.S. District Court for the Western District of North Carolina, seeking injunctions to end violations of the Securities Act, among other demands.
“This is a serious dispute that I look forward to resolving,” Charlebois told the Charlotte Observer via text message Friday. “Until then, no party will be well served by discussing it at this time. »
Money from the alleged scheme went to a range of Charlebois’ personal expenses, the SEC said in its court filing, from covering college tuition for one of his children to limo service bills and a stay at the Ritz Carlton in the mountain village of Beaver Creek. , Colorado, on a family vacation.
How the alleged scheme worked
In a court filing, the SEC alleged that Charlebois used his capital stock in Charlotte and his network of former colleagues at an investment bank he worked at decades ago to solicit investors.
Charlebois has offered investors the opportunity to share in profits made through participation in fictitious options contracts, the SEC said in its press release.
He told potential investors he was a very successful investor who had previously consulted for private companies, according to court documents.
SEC filings show Charlebois told investors he had received stock options from these companies to buy stock in these companies and that he could do so at a price that would result in an immediate gain. for investors.
But those companies had never issued stock options to Charlebois, the SEC told the court, and the purchase contracts were fabricated.
“The funds Charlebois received from investors were not invested as he said he would, and he had no income from anything other than money he received from new investors, loans from personal friends and cash advances from merchants,” the SEC attorneys said. mentioned.
Pay personal expenses
SEC attorneys allege that Charlebois used investor funds to pay other investors as well as family debts and personal expenses such as mortgage payments, vacations and private education for his children.
Those expenses included nearly $11,000 in airfare in 2021, the SEC said in court documents, and a January 2021 family trip to Colorado. That’s where Charlebois spent more than $3,400 over four days “at places like the Ritz Carlton Bachelor Gulch and various restaurants and ski resorts around Beaver Creek and Vail,” the SEC said.
Two months later, in March 2021, the Charlebois family vacationed for a week in Boca Grande, Florida, where they spent $8,792 “despite a negative balance in Charlebois’ joint checking account during the trip,” said the SEC said in its court filing.
When investors raised questions, the SEC alleged that Charlebois engaged in “appeasement activity,” such as saying he was working on other pressing business projects or that the transfer of funds was delayed.
Charlebois also “provided fabricated materials to (investors) to induce them to invest money with him and entities he controlled,” the SEC claimed in court documents.
From Feb. 5, 2019, to April 30, 2022, at least $7.1 million in investor funds were disbursed into Charlebois’ accounts, of which at least $4.4 million was disbursed to investors, according to the complaint.
The SEC is seeking an injunction that would permanently restrain Charlebois and its LLC from issuing, buying, offering or selling securities, except to buy or sell securities for its own personal accounts.
The SEC also asked the court to order Charlebois to pay civil penalties, as well as freeze assets and force him to give up “ill-gotten gains,” the SEC said in its press release.
The investigation into the matter is ongoing, the SEC said.
This story was originally published May 20, 2022 4:13 p.m.