SEC Charges Ephren J. Taylor, II with Operating a Ponzi Scheme

Jack Humphrey, Regulatory journalist
April 13, 2012 /

The US Securities and Exchange Commission charged Ephren Taylor II with running a Ponzi scheme that targeted investors in church congregations. The SEC also charged City Capital Corporation and its former chief operating officer Wendy Connor for their roles in the scheme.

According to the SEC, Taylor and City Capital raised approximately $11 million through two fraudulent offerings: (1) promissory notes supposedly funding various small businesses, and (2) interests in “sweepstakes machines.”

In addition to promising high rates of return, the SEC alleges that Taylor assured investors he had a long track record of success, that investor funds would be used to support businesses in economically disadvantaged areas and a portion of profits would go to charity.

In reality, according to the SEC’s complaint, investor money was used to pay other investors, finance Taylor’s personal expenses, or fund City Capital’s payroll, rent, and other costs. City Capital’s business ventures were consistently unprofitable, and no meaningful amounts of investor money were ever sent to charities.

The complaint seeks disgorgement, financial penalties and permanent injunctive relief against all defendants, as well as officer and director bars against Taylor and Connor.

 

Share your opinion