Court Freezes Assets of Los Angeles Man Charged with Municipal Bond Fraud

Jack Humphrey, Regulatory journalist
April 20, 2012 /

An emergency court order has frozen the assets of a Los Angeles man orchestrating a securities fraud by falsely presenting himself to investors as a specialist in municipal bond investments.

The US SEC alleges that Michael Anthony Gonzalez raised approximately $1 million since February 2010 by telling investors he would invest their money in specific tax-exempt municipal bonds insured by the Securities Investor Protection Corporation (SIPC). In reality, Gonzalez never purchased the bonds and instead deposited investor money into his own bank account for personal use. He later attempted to conceal the scheme by providing investors with phony confirmation statements.

According to the SEC’s complaint filed in the United States District Court for the Central District of California, Gonzalez falsely told investors that he was associated with New York-based broker-dealer May Capital Group in order to portray himself as a legitimate money manager.

Gonzalez had no dealings with May Capital, and through his false representations and fake confirmations he succeeded in giving investors the false impression that their investments were insured and safe. Gonzalez also provided investors with phony trade confirmations that identified securities that were either not purchased or non-existent.

The Honorable S. James Otero, United States District Judge, granted the SEC’s request for a temporary restraining order against Gonzalez and issued orders freezing his assets, requiring accountings, prohibiting the destruction of documents, and granting expedited discovery .

The court will hold a hearing on the SEC’s motion for a preliminary injunction on May 25, 2012.

In addition to the emergency relief, the SEC’s complaint seeks preliminary and permanent injunctions, disgorgement, prejudgment interest, and financial penalties against Gonzalez.

 

Share your opinion