SEC Levels Fraud Charges Against Georgia Politician Who Allegedly Ran a Ponzi Scheme

By:
Chris Gaetano
Published Date:
Jul 31, 2020
The Securities and Exchange Commission has charged Clarence Dean Alford, formerly a member of Georgia's state General Assembly, with running a Ponzi scheme that allegedly defrauded at least 100 investors out of $23 million. According to the complaint, the politician is said to have sold people, primarily Indian-American professionals, promissory notes to finance alleged energy projects through his company, Allied Energy Services. The SEC said that he told these investors that the notes would generate a high return and that his company was the picture of health when, in truth, it had been on the verge of collapse for years. In a typical Ponzi fashion, said the complaint, he used the funds from new investors in the scheme to pay off the old investors. Also typical to Ponzi schemes, this could not be sustained over the long run, leading to a massive collapse in 2019, the scheme having by then failed to make promised interest payments to several investors and then failed to repay the investors’ principal.

“As alleged in our complaint, Alford was a prominent member of the community who misled retail investors for personal gain,” said Justin Jeffries, associate regional director for the SEC’s Atlanta regional office. “Investors should be wary whenever they are promised guaranteed, lucrative investment opportunities.”

Alford neither confirmed nor denied the charges leveled against him. Despite this, he still consented to entry of a judgment finding that he violated the antifraud provisions of the federal securities laws and ordering permanent and conduct-based injunctions. Alford also agreed that the amounts of civil penalties, disgorgement and prejudgment interest would be determined by the court at a later date upon motion by the SEC. The proposed judgment is subject to court approval.

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