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Real estate industry

SEC Charges Chicago-Area Company and Owner with $12 Million Ponzi Scheme

Strategic Insights

— 1 min read

The Securities and Exchange Commission (SEC) has charged Robert R. Anderson, owner of Rosand Enterprises, with perpetrating a Ponzi scheme that promised investors extraordinary returns from a real estate business. Anderson issued promissory notes to investors, claiming returns ranging from 10 to 20 percent per month, but instead used investor funds to pay earlier investors and fund his personal expenses.

Key Takeaways:

  • The SEC alleges that Anderson raised approximately $12 million from at least 77 investors between December 2005 and May 2008.
  • Anderson used approximately $7.9 million to make monthly "interest" and return of principal payments to investors, and $1.9 million to invest in suspicious offerings.
  • He misused $632,000 to pay employees, independent contractors, and office expenses with investor funds, and $818,000 for his own and his family's personal expenses.
  • The SEC's complaint charges Anderson and Rosand Enterprises with violating the antifraud and registration provisions of the federal securities laws.
  • The SEC is seeking a permanent injunction, disgorgement of ill-gotten gains with prejudgment interest, and a financial penalty against Anderson.

Statistics:

  • $12 million: the approximate amount of money raised from at least 77 investors between December 2005 and May 2008.
  • $7.9 million: the amount used to make monthly "interest" and return of principal payments to investors.
  • $1.9 million: the amount used to invest in suspicious offerings.
  • $632,000: the amount misused to pay employees, independent contractors, and office expenses with investor funds.
  • $818,000: the amount misused for personal expenses, including $326,000 for credit card payments, $142,000 on tuition and a wedding for his daughter, and $38,000 on cars.

Sources:

  • "SEC Complaint Litigation Release No. 21688"
  • "U.S. District Court in Chicago"
  • Merri Jo Gillette, Director of the SEC's Chicago Regional Office
  • Justin M. Delfino, Wilburn Saylor, and Steven L. Klawans of the SEC's Chicago Regional Office
  • Steven C. Seeger of the SEC's Chicago Regional Office

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