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First there was the Better Life Club of America, Inc. (BLC). All one had to do was invest some money (usually from $250 to $4,000) and—bingo—the investment would magically double in 90 days. The money was supposed to fund the establishment and operation of new 1-900 phone lines, a certain cash cow for a savvy investor.
The founder of BLC, Robert N. Taylor, came under the scrutiny of the Securities Exchange Commission (SEC) in 1995, two years after setting up his company. The SEC alleged, in essence, “If it smells like a Ponzi, tastes like a Ponzi and looks like a Ponzi … hey, it’s probably a Ponzi!” In short, new money was being used to cover old money, so they filed a lawsuit, seeking to recover $26 million. Taylor was charged and convicted, receiving a 41-month prison term earlier this year.
But the story does not end there. More recently, the SEC has filed another suit, this time against two more entities. James E. Washington Jr. and Jacob N. Haynes, principals of two investment groups, are named in a civil suit brought against Dreams Unlimited Investments Inc. (DUI) and Concepts Unlimited Investments Group (CUIG). The SEC alleges that DUI and CUIG solicited funds for BLC—about $5 million, in fact—even during the time they (Dreams and Concepts) knew an investigation was being conducted by the SEC for potential securities law violations.
Washington and Haynes claim they too were victims of Taylor and BLC. The SEC claims the “victims” received over $7 million in undisclosed commissions and salaries from BLC and others. Washington and Haynes claim no liability and have indicated they will countersue. The case (or cases) will be heard in US District Court in Washington, DC, at a future date.
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