On March 3, 2010, the Securities and Exchange Commission (“SEC”) filed a complaint against Mitchell, Porter & Williams, Inc. (“MPW”), its principal, Thomas L. Mitchell, a Los Angeles resident, as well as a California trust and Nevada corporation controlled by Mitchell, alleging that the defendants have been targeting retiring MTA bus operators in Los Angeles as investors/victims of an ongoing Ponzi scheme operated by the defendants.
The SEC alleged that, since at least 1995, Mitchell has raised at least $14.7 million from at least 82 clients nationwide through a fraudulent promissory note offering issued by the California trust and Nevada corporation. Mitchell solicited his clients, most of whom are either eligible to retire or recently retired Los Angeles MTA bus operators, through word of mouth referrals. He convinced these clients to take their MTA retirement pensions in a lump sum payment, rather than as a monthly annuity, and then encourages them to roll this money into a custodial IRA account, which is then invested in one of the fraudulent promissory note programs offered through Mitchell’s adviser entity, MPW, with offering rates of return ranging from 10-15% for 3 to 6 year terms.
The SEC is seeking emergency relief against the defendants, including a temporary restraining order, an asset freeze, an order prohibiting the destruction of documents, and an order expediting discovery, as well as preliminary and permanent injunctions, disgorgement with prejudgment interest, and civil penalties.
If you have questions or would like to discuss this SEC action further, please contact Jeffrey Wittenberg at 877-352-2010.