This week, it was announced that the Securities and Exchange Commission had charged a Raleigh, North Carolina-based investment adviser with running a Ponzi scheme. The scheme allegedly primarily targeted the defendant’s own clients, many of whom retired and elderly. The SEC accuses Stephen C. Peters of using his investment adviser firm, VisionQuest Wealth Management, to sell promissory notes issued by another one of his companies, VisionQuest Capital.

Peters allegedly promised that the proceeds would be invested into revenue-producing businesses and that he nor his businesses would receive compensation. Peters is also accused of claiming that the VisionQuest Capital notes came with little to no risk of loss and were “guaranteed”. The SEC’s complaint alleges that investor funds were not used as promised.

The defendant is accused of spending at least $4.4 million on personal expenses, including remodeling a large farm in North Carolina and purchasing fine art. The defendant is also accused of spending at least $4.9 million to make Ponzi payment to earlier investors. In parallel action, The United States Attorney’s Office for the Eastern District of North Carolina had announced criminal charges against Peters.

The SEC will seek disgorgement of ill-gotten gains plus interest and penalties as well as injunctions Additional details can be found here.

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