16 April – LawFuel – The Law News Network – Promoters Promised Safety and High Returns But Secretly Used Investor Funds To Speculate In Gold And Silver Markets
SEC v. Larry Michael Parrish, et al., 05 Civ. 1031 (D. Md., filed April 14th, 2005)
The United States Securities and Exchange Commission on Thursday filed an emergency action in Maryland Federal District court to halt an ongoing fraudulent scheme that has raised at least $8.2 million dollars with promises of risk-free returns of between 1 and 5 percent per month. The Commission’s request for a temporary restraining order was granted by the Honorable Judge Frederick Motz, who, pending a preliminary hearing, also froze certain assets of defendants Larry Michael Parrish and Michael Edward Zimmerman, the two entities through which they conducted the alleged fraud, defendants Z-Par Holdings, Inc. and Z-Par Investment Fund II, LLC, and certain assets of relief defendants Edward Akopian and the entity he controls, Capital Ban Corp. The SEC alleges that unbeknownst to investors, most of their money was transferred to relief defendants Edward Akopian and the entity he controls, Capital Ban Corp and subsequently used to speculate in the gold and silver markets.
The Commission’s complaint alleges that the defendants, Larry Parrish and Michael Zimmerman, working off of leads generated by a small, Georgia-based broker-dealer, collected more than $8.2 million from investors, including several retirees, by falsely promising that the funds would be held at Citigroup and managed by the defendants to produce steady, risk-free returns of between 1 and 5 percent per month through investment in debt securities issued by the “top fifty banks.” In fact, contrary to what investors were told, the majority of the invested funds were ultimately transferred to Capital Ban Corp. and Akopian, who leveraged them and then used them to engage in highly speculative and expensive trading in the precious metals markets.
Specifically, the complaint charges the defendants with violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and seeks, against each, civil penalties, disgorgement of all ill-gotten gains plus prejudgment interest and preliminary and permanent injunctions barring future violations of the anti-fraud provisions of the federal securities laws.
Unscrupulous promoters continue to victimize the public with Prime Bank schemes. Accordingly, investors are advised to access the Commission’s “Prime Bank” Investor Alert, which provides tips on how to avoid being a victim of these scams. The investor alert can be found on the Commission’s web site, at www.sec.gov/divisions/enforce/primebank.shtml. To report suspicious activity involving possible fraud, visit http://www.sec.gov/complaint.shtml.