SEC Halts Ponzi Scheme Targeting U.S. Military Service Members
The Securities and Exchange Commission settled charges recently against a Colorado man for defrauding investors, including U.S. military service members and others.
The SEC’s complaint alleges that Milton J. Dosal, Jr. raised nearly $100,000 over a two-year period from approximately 41 investors — about a quarter of which were cadets at the U.S. Air Force Academy — under the guise that he would day-trade stocks on their behalf. Dosal met a number of investors through car club events, the SEC says.
According to the complaint, Dosal falsely held himself out as a securities professional. In reality, Dosal has never held any securities license. The SEC states that Dosal misled investors about his trading activity and their investment returns. Dosal told investors that they could, with little risk, expect weekly returns of up to 10 percent, the SEC’s complaint alleges.
According to the SEC, Dosal used fake stockbroker agreements and false account balances for some investors. He also used investor funds for personal expenses and diverted new investor funds to pay back prior investors, in a Ponzi-scheme fashion, the SEC says.
Without admitting or denying the allegations in the SEC’s complaint, Dosal consented to the entry of a final judgment permanently enjoining him from violating the antifraud and broker-dealer registration provisions of the federal securities laws. Dosal agreed to return $51,633 of allegedly ill-gotten gains plus prejudgment interest of $3,503, and to pay a $51,633 civil penalty.