Attorney General Cuomo Obtains Court Order Freezing Assets Of Brooklyn Ponzi And Pyramid Scheme
NEW YORK, N.Y. (December 17, 2009) - Attorney General Andrew M. Cuomo today announced a court order freezing the assets of Unlimited Wealth Associates and company officials Robert Donald and his wife Annette Stuart Donald, as well as numerous other businesses under their control, for allegedly operating a combination Ponzi and pyramid scheme out of Donald’s home in the Bushwick section of Brooklyn in violation of the state’s securities law, known as the “Martin Act.”
According to court papers, the Attorney General’s investigation has revealed that Donald and his wife, while operating businesses using the names Unlimited Wealth Associates, United Wealth Associates, Unlimited Enterprises, and Wealth Associates Group, fraudulently obtained at least $7 million from more than 1,000 investors nationwide in a series of get-rich-quick schemes.
“While this company promised unlimited wealth, our investigation found seemingly limitless fraud and deceit as they went after investors’ savings,” said Attorney General Cuomo. “We will continue to have zero tolerance for financial schemers trying to set up shop in New York.”
In a Ponzi scheme, money paid by newer investors is not invested in legitimate ways but is used to pay fictitious profits to older investors. In a pyramid scheme, investors are paid commissions or finders’ fees to bring new investors into the operation. The Attorney General has obtained records showing that Donald and the other respondents have been operating a series of Ponzi and pyramid schemes since at least 2004.
Documents obtained by the Attorney General, including emails, newsletters and Web site pages, show that the respondents routinely made false and misleading representations that investors could earn enormous profits on modest investments, with little or no risk involved. Schemes included:
- Investors in a so-called “Wealth Units” program were falsely informed that they would “earn 2% per business day, payable every 60 business days, for a total of 180 business days.”
- Investors in an “Infinite Cycle of Wealth” program were falsely informed that the program “provides you with UNLIMITED INCOME FOR LIFE! You can receive thousands of dollars over and over again - to INFINITY!” and “With a ONE TIME INVESTMENT contribution of $5,000 you can earn over $1.2 million, once you complete 7 phases which takes approximately eighteen months.”
- Investors in a “Capital Growth Program” were falsely informed that they could “receive up to 100% return every month” and would “have the opportunity to MAKE WELL OVER $500,000 for each $1000 that you deposit, within 15 months from the day the funds enter into trade.”
- Investors in a “40 Week Proposal” were falsely informed that their expected return would be “40 payments of UP TO 50% for each $1000 contribution. That’s a total of $20,000 per $1000.”
- Many of the representations falsely claimed that there was no risk involved in the investments. One such false statement promised “The Unlimited Wealth Units is an ingenious RISK FREE way to LET YOUR MONEY WORK FOR YOU!” (emphasis in original).
The investigation by the Attorney General’s Office revealed that Donald was covering up the fraudulent operation by informing investors that their investments have been lost or stolen by those with whom Donald purportedly invested the victims’ funds. Donald told victims that he was raising new funds that would be invested so that both new and old investors would recover their principal and receive handsome profits.
The Attorney General thanks the New York office of the United States Securities and Exchange Commission and the United States Postal Inspection Service for their assistance in the investigation.
The case is being handled by Assistant Attorneys General Anita Barrett, Verle Johnson, and Michelle Maerov, under the direction of Bureau Chiefs David Markowitz and Gail Heatherly and Deputy Bureau Chief Felice Sontupe, with assistance provided by Investigator Edward Ortiz and Supervising Investigator Jonas Harris.