A Securities and Exchange Commission supervisor handled the finances for a Scottsdale-based flim-flam artist's Ponzi scheme, than received a $25,000 retirement buyout package.
Investigators with the Arizona Corporation Commission notified the SEC late last year about its naughty employee after finding e-mails from the official to one of the scheme's victims. The allegation can be found in a report put out Monday by the SEC's Office of Inspector General that updates the status of several other internal investigations, including those related to billionaire scamster Bernie Madoff. The supervisor tied to the Arizona case wasn't named in the report but was said to have worked in the SEC's Office of Administrative Services in Washington D.C. There, she used her SEC computer to conduct business for numerologist Jerome Carter on a near-daily basis, the e-mail evidence revealed.
Carter, who ran a company called The Greatest Only Divine Productions, raised $432,450 from at least 65 investors, states a June 11 news release from the state Corporation Commission.
The superstitious victims apparently believed Carter's boast that his ability to predict the future meant they'd be getting a fantastic return on various investments. The commission says Carter used most of the money for his personal benefit but returned $154,450 to some of the investors "in Ponzi-like fashion."
Carter was ordered to pay $278,000 in restitution, plus a $75,000 fine.About two months ago, the 53-year-old Carter lost control of his motorcyle in the intersection of Pinnacle Peak and Pima roads and died when his helmet-less head smacked the ground.
The SEC report says it found no proof that the unnamed supervisor knew Carter ran a Ponzi scheme, but that her involvement represented a major policy and ethics breach. The Justice Department declined to prosecute the woman criminally. Serious disciplinary action would have been taken against the SEC supervisor, the report states, but for the fact that she took an early retirement after she realized her jig was up. The Inspector General's office recommended making the woman pay back the buyout cash and other early retirement incentives in a late September report to SEC management about her, but no action has yet been taken.
You can read more details about the case in the SEC report below, starting on page 87.
