If someone approaches you about investing in a Prime Bank investment program, walk away. Do not give them your time or money. It’s a scam.
The Securities and Exchange Commission shut down another one of these scams. Unfortunately, the investors lost at least $1.2 million before the SEC could step in.
According to the complaint, attorney Allen Ross Smith leveraged his title and position as an attorney to convince investors. The scheme was orchestrated by Switzerland-based MALOM Group AG, a company named with an acronym for “Make A Lot Of Money,” through individuals in Zurich and Las Vegas. Smith acted as MALOM’s attorney as well as its escrow agent and “paymaster.”
The SEC previously charged Malom Group AG, its principals, and agents in SEC v. Malom Group AG, et al, 2:13-cv-2280 (D. Nev. Dec. 16, 2013) and SEC v. Erwin et al., 2:14-cv-623 (D. Nev. Apr. 23, 2014). The principals of MALOM, Martin U. Schläpfer and Hans-Jurg Lips, are incarcerated in Switzerland.
The facts of the case are a mess, with various promises of funds coming from many different sources. At one point there was the lure of H-series Brazilian Letras do Tesouro Nacional (“LTNs”) – bonds issued by the Brazilian government in 1972 that were purportedly worth in excess of $200 million.
It looks like Smith was scammed into using his attorney escrow account to funnel investor money into the scam and out to MALOM’s principals. According to the complaint, Smith was making easy money, taking 1% of the incoming funds, by acting as the paymaster.
But then he stepped further over the line when he began taking a more active role in selling MALOM’s securities. Lawyer gone bad.
References:
- Prime Bank Investment Fraud in Investor.gov
- How Prime Bank Frauds Work by the Securities and Exchange Commission
- Complaint Against Allen Smith (pdf)
- SEC Charges Florida Lawyer in Connection with Multi-Million Dollar Prime Bank Scheme
- There Is No Secret International Market for Prime Bank Investments