On June 10, 2010, the Securities and Exchange Commission filed an injunctive action in U.S. District Court for the Western District of Washington, charging 6 individuals and four companies with securities fraud. The complaint alleges that Milowe Allen Brost, Gary Allen Sorenson, Larry Lee Adair, Ward K. Capstick, Bradley Dean Regier, Martin M. Werner, Syndicated Gold Depository, Merendon Mining Corp. Ltd., Merendon Mining (Nevada) Inc., and the Institute for Financial Learning Group of Companies, Inc. perpetrated a $300 million Ponzi scheme on investors in a purportedly successful gold mining operation.

The SEC alleges that Brost and Sorenson of Calgary were the primary architects and beneficiaries of the scheme that persuaded more than 3,000 investors across the U.S. and Canada to invest their savings, retirement funds and even home equity. Brost and his sales team presented themselves as an independent financial education firm that had discovered profitable investment opportunities with companies involved in gold mining. They held seminars where they promised investors they could earn 18 to 36 percent annual returns by investing with these companies, and they claimed the investments were fully collateralized by gold.

Unbeknownst to investors, they were actually investing in shell companies owned or controlled by Brost or Sorenson. Investor funds were often transferred multiple times through numerous bank accounts held as far away as Asia, Europe and South America, and then ultimately used to make “interest payments” to investors, fund the few unprofitable companies that actually had operations, and personally enrich Brost, Sorenson and others involved in the scheme.

MORE >>>> http://sec.gov/litigation/litreleases/2010/lr21552.htm