US Securities and Exchange Commission - VALIC

SEC Charges Former New York Investment Advisor and Daughter With Conducting a Ponzi Scheme

SECWashington D.C., Dec. 13, 2018 — The Securities and Exchange Commission today charged a former Rockland County, New York-based Investment Advisor and his daughter with conducting a multi-million dollar Ponzi scheme that defrauded local community members as well as members of their family and close friends.

The SEC alleges that Hector May, an investment adviser representative and the president and chief compliance officer of the now-defunct Executive Compensation Planners Inc. (ECP), and his daughter Vania Bell, who served as ECP’s controller and senior compliance administrator, misappropriated more than $7.9 million in a Ponzi scheme involving bonds.

According to the SEC’s complaint, with Bell’s help, May lied to investors by promising to invest their money in bonds when they actually used the money to pay for personal and business expenses, as well as extravagant items, such as jewelry, furs, vacations, and a limousine driver. To conceal the fraudulent scheme, they sent bogus account statements to clients referencing the bonds that had never been purchased.

In a parallel action, the U.S. Attorney’s Office for the Southern District of New York today announced criminal charges against May, and he has pleaded guilty to those charges.

“As alleged, this father-daughter team betrayed the very people who knew and trusted them – including family members, close friends, seniors, and local community members,” said Marc P. Berger, Director of the SEC’s New York Regional Office.

The SEC’s Office of Investor Education and Advocacy (OIEA) and the Retail Strategy Task Force issued an Investor Alert discussing the classic warning signs of a Ponzi scheme targeting retail investors, including seniors.

“The Enforcement Division protects retail investors by bringing impactful cases and partnering with OIEA to provide investors with tools to educate and empower themselves,” said Charu A. Chandrasekhar, Chief of the Division of Enforcement’s Retail Strategy Task Force.

The SEC’s complaint, filed in federal court in the Southern District of New York, charges May and Bell with violating the antifraud provisions of the securities laws. May has agreed to the entry of a partial judgment against him in which he consents to injunctive relief with monetary and other relief to be decided in the future. The SEC seeks the return of ill-gotten gains, with interest, as well as financial penalties.

The SEC’s investigation, which is continuing, is being conducted by Tracy E. Sivitz and Sandeep M. Satwalekar in the New York Regional Office, and Kimberly A. Yuhas and Charu A. Chandrasekhar of the Enforcement Division’s Retail Strategy Task Force. The case is being supervised by Lara Shalov Mehraban.  The SEC appreciates the assistance of the U.S. Attorney’s Office for the Southern District of New York, the U.S. Postal Inspection Service, and the Federal Bureau of Investigation.