SEC v. Roosevelt Tobias Bailey; Borg Investment Bank & Capital Trust; Alvin Christopher Jones; and Borg Global Holdings, LLC, No. 1:24-cv-03309, Northern District of Georgia (July 26, 2024) — Complaint

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IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION

Civil Action No.

UNITED STATES SECURITIES AND
EXCHANGE COMMISSION,

          Plaintiff,

v.

ROOSEVELT TOBIAS BAILEY,
BORG INVESTMENT BANK &
CAPITAL TRUST, and
ALVIN CHRISTOPHER JONES,

          Defendants,          and

BORG GLOBAL HOLDINGS, LLC,

 Relief Defendant.

COMPLAINT AND JURY DEMAND

Plaintiff, United States Securities and Exchange Commission (“SEC”), for
its Complaint against Defendants Roosevelt Tobias Bailey (“Bailey”), Borg
Investment Bank & Capital Trust (“Borg Bank”), and Alvin Christopher Jones
(“Jones”) (collectively, “Defendants”) and Relief Defendant Borg Global Holdings,
LLC (“Borg Global” or “Relief Defendant”), alleges:

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INTRODUCTION

1. Through an entity called Borg Bank, Bailey raised approximately $1.6
million by offering and selling fraudulent investments to the public on the promise
of astronomical returns obtainable over short periods of time with little or no risk
of principal loss to investors. Contrary to these representations, investors never
received their promised returns and most lost all of their investment while Bailey
profited.
2. Borg Bank, through Bailey, offered and sold two types of investment
contracts under this guise: one in which an investor would front fees to supposedly
“lease” and “monetize” high-value purported bank instruments called standby
letters of credit (“SBLC”) and another where investors’ money would be pooled
and invested in supposedly lucrative gold and diamond investments in Africa and
South America.
3. In reality, Borg Bank never leased or monetized SBLCs as it said it
would and it obtained only a few precious stones that Bailey sold for minimal
profit. Instead, substantial amounts of investors’ funds were directed to Bailey’s
personal benefit, including to buy him furs and furniture, pay his credit card bills,
and pay fees for his personal real estate deals that never closed. Of the
approximately $1.6 million raised, Bailey disbursed or directed to be disbursed at
least $410,000 for his benefit, either transferring investor money to his own bank

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accounts or making payments to third parties for his benefit, sent at least $163,000
to an account for another company he controlled, Relief Defendant Borg Global,
and made approximately $250,000 in Ponzi payments to earlier investors.
4. As part of the scheme, Bailey directed the majority of investors to
send their investments to an Interest on Lawyer’s Trust Account (“IOLTA”) held by
Defendant Jones, an attorney and former Florida prosecutor, who disregarded
numerous red flags as he provided substantial assistance to Bailey and Borg Bank’s
fraud. Jones received numerous investor complaints that Bailey and Borg Bank
were engaged in fraud or misusing the money that Jones was collecting on their
behalf, yet Jones continued to facilitate the scheme’s financial transactions and
collect fees for that work.
5. By engaging in this conduct, Bailey and Borg Bank violated Section
17(a) of the Securities Act of 1933 (“Securities Act”), 15 U.S.C. § 77q(a), Section
10(b) of the Securities Exchange Act of 1934 (“Exchange Act”), 15 U.S.C.
§ 78j(b), and Exchange Act Rule 10b-5 thereunder, 17 C.F.R. § 240.10b-5 (13 FR
8183, Dec. 22, 1948, as amended at 16 FR 7928, Aug. 11, 1951). For his part,
Jones aided and abetted Bailey and Borg Bank’s violations of Section 17(a) of the
Securities Act, 15 U.S.C. § 77q(a), Section 10(b) of the Exchange Act, 15 U.S.C.
§ 78j(b), and Exchange Act Rule 10b-5 thereunder, 17 C.F.R. § 240.10b-5. Unless

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restrained and enjoined, Defendants will continue to violate the federal securities
laws.
DEFENDANTS
6. Borg Bank is a Washington, D.C. statutory trust formed on October
26, 2018, with its principal place of business in Duluth, Georgia. Bailey is the
chairman, president, CEO, and sole managing trustee of Borg Bank, which has no
other employees.
7. Bailey, age 67, is a resident of Buford, Georgia. In addition to Borg
Bank, Bailey owns and solely controls other corporate entities that use the “Borg”
name, including Borg Global. In 2001, Bailey was convicted of felony copyright
infringement and tax evasion.
8. Jones, age 55, is a resident of Tampa, Florida. Jones is an attorney
licensed in Florida and a former state prosecutor. During the relevant period, he
owned and managed his own firm, Alvin C. Jones, P.A.
RELIEF DEFENDANT
9. Borg Global is a Georgia limited liability company formed on
September 25, 2017. Bailey solely owns and controls Borg Global, which received
at least $163,000 in misappropriated investor funds.

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JURISDICTION AND VENUE
10. The SEC brings this action pursuant to authority conferred on it by
Sections 20(b), 20(d)(1), and 20(e) of the Securities Act [15 U.S.C. §§ 77t(b),
77t(d)(1), and 77t(e)] and Sections 21(d)(1), (2), (3), (5) and (7), and 21(e) of the
Exchange Act [15 U.S.C. §§ 78u(d)(1), (2), (3), (5), and (7) and 78u(e)] to restrain
and enjoin the Defendants from engaging in the acts, practices, and courses of
business described in this Complaint and similar acts, practices, and courses of
business. The SEC seeks permanent injunctions, disgorgement of ill-gotten gains
derived from the conduct alleged in the Complaint plus prejudgment interest
thereon, and civil penalties as well as an officer and director bar against Bailey.
The SEC also seeks disgorgement of ill-gotten gains plus prejudgment interest
thereon from the Relief Defendant.
11. Defendants, directly or indirectly, singly and in concert, made use of
the means or instruments of transportation or communications in interstate
commerce, the means or instrumentalities of interstate commerce, or of the mails,
in connection with the transactions, acts, practice, and courses of business alleged
in this Complaint, certain of which occurred within this District.
12. This Court has jurisdiction over this action pursuant to Sections 20(b),
20(d)(1), 20(e), and 22(a) of the Securities Act [15 U.S.C. §§ 77t(b), 77t(d)(1),
77t(e) and 77v(a)], and Sections 21(d)(1), (2), (3), (5), and (7), 21(e), and 27(a) of

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the Exchange Act [15 U.S.C. §§ 78u(d)(1), (2), (3), (5), and (7), 78u(e), and
78aa(a)].
13. Venue is proper in the Northern District of Georgia pursuant to
Section 22(a) of the Securities Act [15 U.S.C. § 77v(a)] and Section 27(a) of the
Exchange Act [15 U.S.C. § 78aa(a)] because certain of the acts and transactions
constituting violations of the Securities Act and the Exchange Act occurred in this
District, including the offer and sale of securities and the misappropriation of
investor funds through transactions at banks located in this District. In addition,
Bailey resides and transacts business in, and Borg Bank’s principal place of
business is in, this District.
14. On or about September 13, 2023, Bailey and Borg Bank agreed to toll
the statute of limitations from September 13, 2023 through June 11, 2024. On or
about April 19, 2024, Bailey and Borg Bank agreed to further toll the statute of
limitations for the period of June 12, 2024 through September 10, 2024.
FACTUAL ALLEGATIONS
I. BAILEY OPERATED AND CONTROLLED BORG BANK.
15. Bailey formed Borg Bank on October 26, 2018. Bailey was the
chairman, president, CEO, and sole managing trustee of Borg Bank. Borg Bank
had no other directors, officers, or trustees, did not carry out any traditional

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banking operations, was not chartered as a bank with any state, and was not
registered with the SEC in any capacity.
16. From at least November 2018 through in or about October 2022 (“the
Relevant Period”), Borg Bank, through Bailey, developed and marketed investment
programs. The primary investment program Borg Bank marketed is generally
referred to as a “high-yield” or “prime bank” investment through which clients
could have their assets invested at Borg Bank’s discretion based on Borg Bank’s
representations that these investments would earn substantial returns over a short
period of time with little or no risk.
II. BORG BANK, THROUGH BAILEY, OFFERED AND SOLD
SECURITIES.
17. Borg Bank, through Bailey, solicited potential investors and promoted
two investment programs through direct verbal communications, conference calls,
and Zoom meetings, during in-person meetings, and through email and WhatsApp
messages.
18. Bailey used his own contacts and “referral agents” to identify
potential investors.
19.  Borg Bank, through Bailey, provided potential investors who
expressed an interest in investing with an “Asset Placement and Management
Agreement” (“APMA”) for a particular investment program, either the Standby

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Letter of Credit Investment Program (“SBLC Program”) or the Micro-Cap Wealth
Investment Program (“Micro-Cap Program”).
20. Those APMAs described the conditions under which Borg Bank
purported it would take and use investor money for the promised investment
schemes. As detailed below, these APMAs contained numerous false and
misleading statements. In addition, under the APMAs, Borg Bank agreed to
manage assets for trading or for “buy/sell investment purposes” and stated that
Bailey had “full authority” over Borg Bank. The APMAs described Borg Bank as
an entity involved in “global asset monetization,” “leverage,” and “global buy/sell
trading activities.”
21. Borg Bank, through Bailey, prepared APMAs for the SBLC Program
and Micro-Cap Programs. Bailey sent the SBLC and Micro-Cap Program APMAs
to investors, and investors signed the documents and returned them to Bailey.
22. When an investor agreed to invest with Borg Bank, the investor and
Bailey, as Borg Bank’s representative, signed an APMA that stated the investor’s
money would be used for one of the investment programs described above.
23. Bailey directed most Micro-Cap Program investors to transfer their
funds to an account belonging to Relief Defendant Borg Global. Bailey directed
other investors to transfer their funds to Jones’s law firm’s IOLTA account. Jones

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then transferred the investors’ money, minus a fee for himself, pursuant to Bailey’s
directions.
24. Section 2(a)(1) of the Securities Act [15 U.S.C. § 77b(a)(1)] and
Section 3(a)(10) of the Exchange Act [15 U.S.C. § 78c(a)(10)] define “security” to
include any “investment contract.”
25. Borg Bank, through Bailey, offered and sold securities in the form of
investment contracts in the SBLC Program and the Micro-Cap Program. The
financial success or failure of the SBLC and Micro-Cap Programs offered by Borg
Bank, through Bailey, was inextricably tied to the efforts of Bailey and Borg Bank.
Investors had no role in the management of Borg Bank, the SBLC Program, or the
Micro-Cap Program, and they relied exclusively on Bailey to manage Borg Bank
and its investment programs and to conduct their business affairs.
26. The SBLC and Micro-Cap investment programs offered and sold by
Borg Bank, through Bailey, were “securities” as defined in Section 2(a)(1) of the
Securities Act and Section 3(a)(10) of the Exchange Act [15 U.S.C. §§ 77b(a)(1)
and 78c(a)(10)].
III. BORG BANK’S INVESTMENT PROGRAMS
A. SBLC Program
27. Under the SBLC Program, Borg Bank, through Bailey, sought and
obtained investor funds on the representation that those funds would be used to pay

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fees to lease and “monetize” an SBLC from one or more large international banks.
During the Relevant Period, Borg Bank, through Bailey, raised over $1.4 million
from at least 20 investors through SBLC Program investment contracts.
28. An SBLC is a type of bank guarantee that is issued by a bank and
promises payment on behalf of another party when certain conditions are satisfied.
As part of Borg Bank’s offerings, Bailey frequently employed the terms “standby
letter of credit” and “SBLC,” as well as other banking-industry terminology. Using
these terms as he did created the false appearance that Bailey was steeped in and
had substantial experience in the financial industry, when he did not, and had
access to sophisticated financial products, when he did not. During the Relevant
Period, before soliciting investors for Borg Bank’s SBLC Program, Bailey and
Borg Bank had never executed an SBLC transaction of the type offered as part of
the SBLC Program.
29. During the Relevant Period, Borg Bank, through Bailey, represented
that investor funds could be used to acquire and “monetize” SBLCs. Borg Bank,
through Bailey, represented that it would find a “monetizer,” a company that would
use an SBLC as collateral against its own credit line to obtain a loan, retain some
of the proceeds from that monetization, and give the rest of the proceeds to Bailey,
Borg Bank, and their investors. Borg Bank, through Bailey, represented to
investors they could earn up to 16 times their initial investment in as short as 30 to

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90 days. In reality, at the time Borg Bank was raising investor funds, Bailey knew
Borg Bank could never “monetize” an SBLC to generate the astronomical returns
Bailey, on behalf of Borg Bank, represented to investors because Bailey knew that
(1) neither Bailey nor Borg Bank had ever successfully leased or “monetized” an
SBLC with investor money, (2) Borg Bank, through Bailey, had misappropriated or
misused nearly all investor money raised through the SBLC Program, and (3) Borg
Bank, through Bailey, had used barely any investor money toward purported SBLC
expenses.
B. Micro-Cap Program
30. As detailed below, under the Micro-Cap Program, Borg Bank, through
Bailey, sought and obtained investor funds by representing that such investments
would be pooled and used to acquire gold and diamonds abroad, which they would
later resell in the United States at a higher price. Borg Bank, through Bailey, raised
approximately $230,000 from at least six investors from in or about October 2020
through June 2021 through Micro-Cap Program investments.
31. During the Relevant Period, Borg Bank, through Bailey, represented
that the Micro-Cap Program would provide short-term doubling of principal
without investment risk. In reality, Borg Bank made a miniscule profit from the
sale of a small number of precious stones and misappropriated investor funds, and
most investors lost all of their investment.

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C. Borg Bank, Through Bailey, Misappropriated and Misused
Investor Money.
32. Borg Bank never monetized an SBLC and never engaged in the bulk
purchase and resale of precious metals or stones. Instead, as alleged below, Borg
Bank, through Bailey, used new investor money to make Ponzi payments to some
early investors and directed substantial amounts of investors’ money to be used for
Bailey’s personal benefit (including through transfers to Relief Defendant Borg
Global), to buy furs and furniture, pay Bailey’s credit card bills, and pay for fees
for personal real estate deals that never closed.
33. Throughout the Relevant Period, Borg Bank, through Bailey, raised
over $1.4 million from at least 20 investors in the SBLC Program. Borg Bank,
through Bailey, used approximately $230,000 to pay earlier investors, sent at least
approximately $163,000 to Relief Defendant Borg Global, misappropriated
approximately $362,000, and used the remainder to pay for purported business
operations.
34. From at least in or about October 2020 through June 2021, Borg
Bank, through Bailey, raised over $230,000 from six investors in the Micro-Cap
Program, paid over $25,000 to earlier investors, misappropriated approximately
$47,000, and used the remainder to pay for purported business operations.

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IV. BORG BANK, THROUGH BAILEY, MADE FALSE AND
MISLEADING STATEMENTS TO INVESTORS IN CONNECTION
WITH BORG BANK’S SECURITIES OFFERINGS.
35. In raising funds from investors in connection with the SBLC and
Micro-Cap Programs, Borg Bank, through Bailey, made numerous written and oral
materially false and misleading statements regarding, among other things, the use
of investor funds, the “guaranteed” nature of the investments and magnitude of
returns, or Bailey and Borg Bank’s compensation.
A. Borg Bank, Through Bailey, Made False and Misleading
Statements in Connection with the SBLC Program.
36. In raising funds from investors in connection with the SBLC Program,
Borg Bank, through Bailey, made numerous materially false and misleading
statements regarding, among other things, the use of investor funds, the
“guaranteed” nature of the investment and substantial expected returns, and Bailey
and Borg Bank’s compensation being linked only to successful investments.
1. Statements Regarding the Use of Investor Funds
37. Borg Bank, through Bailey, made materially false and misleading
statements in oral and written communications to investors and potential investors
regarding the use of investors’ funds in the SBLC Program, including that investor
money would be used to pay fees to lease or acquire an SBLC from an established
bank.

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38. Borg Bank’s SBLC Program APMAs stated that in return for investors
providing a specified amount of investment principal “to participate in the
facilitation, acquisition, delivery and monetization of a Borg Investment Bank
secured and delivered...[SBLC] from” various well-known banks “for project
funding/financing via Borg Investment Bank,” investors’ funds would be “assigned
and transferred to Borg Investment Bank and/or its nominated financial partners
for asset management and SBLC acquisition activities.” In exchange, “[Borg Bank]
will provide [the investor] with rated and non-rated Bank Issued [sic] SBLC
monetization packages and specialized financial deals.” Borg Bank, through
Bailey, represented that profits would stem “from monetization cash flows created”
in connection with the leased SBLC.
39. Borg Bank, through Bailey, made these or substantially similar
representations in SBLC Program APMAs sent to investors and potential investors,
including on or about November 21, 2018; February 3, 2021; July 15, 2021;
August 4, 2021; September 4, 2021; September 23, 2021; October 6, 2021; April
21, 2022; and October 7, 2022.
40. Borg Bank, through Bailey, made similar representations to investors
regarding the use of funds by phone in or around March 2021 and during in-person
meetings in New Jersey and New York in or around May 2021 and July 2021.

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41. The above statements regarding use of funds to acquire SBLCs were
false and misleading when made because Borg Bank, through Bailey, (1) had used
only a small percentage of investor funds toward SBLC-related expenses; (2) had
immediately misappropriated or misused SBLC Program investor funds by, among
other things, paying earlier investors (i.e., Ponzi payments), paying Bailey or
Relief Defendant Borg Global, and paying purported gold and diamond vendors;
(3) had taken few steps to lease or monetize any SBLC; and (4) did not disclose
that neither Bailey nor Borg Bank had successfully “monetized” any SBLCs.
42. The above false and misleading statements regarding the use of
investors’ funds were material to investors and potential investors because, among
other things, the returns Borg Bank, through Bailey, promised investors were tied
to the deployment of investor funds to lease and monetize SBLCs and to generate
the substantial returns Borg Bank, through Bailey, had promised to investors.
2. Statements Regarding Investment Risks and Returns
43. During the Relevant Period, Borg Bank, through Bailey, made
materially false and misleading statements in oral and written communications
regarding the risk-free nature of the SBLC Program investments and the substantial
expected returns on these supposedly risk-free investments.
44. Borg Bank’s SBLC Program APMAs repeatedly stated that investor
funds would never be at risk. For example, on or about November 21, 2018, Bailey

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sent an investor an SBLC Program APMA which stated, in part: “[a]t no time will
the ‘Assets’ ever be placed at risk of loss . . . during the course of investment,
trading, or profits distribution.”
45. Another SBLC APMA sent to an investor on or about April 21, 2022,
stated, in part: “Borg Investment Bank will provide a guarantee . . . for the amount
of the $125,000 investment from [investor], which guarantees that in the event
where BORG [sic] Investment Bank does NOT succeed in the issuing and
monetization of the SBLC as meant herein, BORG [sic] Investment Bank will
repay the investment amount of $125,000. . . .”
46. Additionally, Borg Bank, through Bailey, represented orally and in the
SBLC Program APMAs that investors would receive returns of up to 16 times an
investor’s principal in a matter of months. For example, on or about August 4,
2021, Bailey sent an investor an SBLC Program APMA that represented their
$50,000 investment would turn into $800,000 in just over a few months and which
included the following asset description and payment schedule, among other
representations:

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 . . .

47. The statements regarding the risk of loss and expected returns were
false and misleading when made because Borg Bank, through Bailey, (1) had
misappropriated and misused the SBLC Program investor funds immediately after
receiving the funds and relied on new investor funds to pay earlier investors (i.e.,
Ponzi payments); (2) had directed investor funds to Bailey personally or to Relief
Defendant Borg Global, which created a likelihood of non-payment for new
investors; (3) failed to disclose that neither Bailey nor Borg Bank had ever
successfully “monetized” any SBLCs; and (4) failed to disclose that Borg Bank did
not intend to use investor funds to “monetize” or lease any SBLC.
48. The above false and misleading statements as to the risk-free nature of
the investments and substantial expected returns on investment were material to
investors and potential investors because the assurance that an investor could not
lose any of their principal would be important to any reasonable investor. In
addition, knowing that the promise of substantial returns, including multiples of an

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initial investment, was not guaranteed, was not likely, and had never occurred
before would have been important to investors who sought to grow the principal of
their investment and obtain gains.
3. Statements Regarding Bailey and Borg Bank’s
Compensation
49. Borg Bank, through Bailey, also made material misrepresentations
with respect to their compensation from SBLC Program investments.
50. On or around July 15, 2021, August 4, 2021, and September 4, 2021,
Bailey communicated to investors through the APMAs that he and Borg Bank were
not being compensated for arranging the lease and monetization of SBLCs and
would only be paid when they successfully monetized an SBLC and received
profits.
51. Similarly, Borg Bank’s SBLC Program APMAs contained payment
schedules, usually titled “Annex,” that described to investors and potential
investors the “profit distribution” of an SBLC Program investment. Those
schedules did not disclose any payments from investor money for fees or
compensation to Bailey or Borg Bank and instead represented that Borg Bank’s
money would come from profits from an SBLC investment.
52. The representations regarding Bailey and Borg Bank’s compensation
were false and misleading when made because (1) Borg Bank, through Bailey, had
immediately compensated itself and Bailey with investor money unrelated to a

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successful monetization of an SBLC; (2) Bailey had directed payments to his and
Borg Bank’s benefit from sources other than the profits of an SBLC Program
investment, namely from investors’ principal; and (3) Borg Bank, through Bailey,
did not disclose that it did not intend to monetize SBLCs from banks and would
instead direct investor money to other purposes.
53. The above false and misleading statements regarding Bailey and Borg
Bank’s compensation were material to investors and potential investors because
knowing that Bailey and Borg Bank would take a portion of investors’ principal as
compensation and that Bailey and Borg Bank’s compensation was not solely
dependent on the success of an investment would be important to any reasonable
investor.
B. Borg Bank, Through Bailey, Made False and Misleading
Statements in Connection with the Micro-Cap Program.
54. In raising funds from investors in connection with the Micro-Cap
Program, Borg Bank, through Bailey, made numerous materially false and
misleading statements regarding, among other things, the use of investor funds and
the “guaranteed” nature of the investment and substantial expected returns.
1. Statements Regarding the Use of Investor Funds
55. From at least in or about October 2020 through June 2021, Borg
Bank, through Bailey, made materially false and misleading statements in oral and
written communications in connection with offering and selling investments in the

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Micro-Cap Program about the use of investors’ funds, including that investors’
money would be used to effect gold and diamond deals—buying precious metals
and stones in Africa and South America and selling them for a higher price in the
United States—and that the profits would be shared with investors.
56. In the Micro-Cap Program APMAs, Borg Bank, through Bailey, stated
that investors’ funds would be “place[d] with Borg Investment Bank for investment
participation purposes via various capital markets trading or buy/sell activities”
and that investors “[made] these funds available to Borg Investment Bank for the
purpose of a Micro-Cap Program Contract . . . or optional Gold or Diamond
buy/sell Contract. . . .” Borg Bank, through Bailey, represented that “[a]s your
Global Investment Banker, [we] will choose the best trading and buy/sell payout
activities in utilizing your cash assets.” Borg Bank, through Bailey, made these or
substantially similar representations in Micro-Cap Program APMAs sent to
investors on or around October 31, 2020; February 24, 2021; and March 9, 2021.
57. When offering the Micro-Cap Program, Borg Bank, through Bailey,
also represented to at least two investors, both orally and in writing, including on
or around October 31, 2020 and March 9, 2021, that investor money would be used
for investments in gold and diamond transactions.
58. The above false and misleading statements regarding the use of funds
for investments for gold and diamond transactions were false and misleading when

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made because Borg Bank, through Bailey, had misappropriated and misused
investor funds immediately after it received them and had only used an
insubstantial percentage of investor funds toward purported gold and diamond
transactions.
59. The above false and misleading statements regarding the use of
investors’ funds for the Micro-Cap Program were material to investors and
potential investors because, among other things, the returns Borg Bank, through
Bailey, promised investors were tied to the gold and diamond transactions that
Borg Bank represented they would effect and would have been needed to generate
the returns Borg Bank had promised to investors. These false and misleading
statements were also material to investors and potential investors because an
investor would have understood that Borg Bank, through Bailey, was going to use
their money in the way they described in the Micro-Cap Program APMAs and not
for things unrelated to investments.
2. Statements Regarding Investment Risks and Returns
60. From at least in or about October 2020 through June 2021, Borg
Bank, through Bailey, made materially false and misleading statements in oral and
written communications in connection with offering and selling investments in the
Micro-Cap Program by, among other ways, representing that investments were not
at risk of loss and that investors would double their investment in 30 days.

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61. Borg Bank, through Bailey, represented orally and in the Micro-Cap
Program APMAs that investors’ money was guaranteed and would never be put at
risk of loss. Borg Bank, through Bailey, made these representations in Micro-Cap
Program APMAs sent to investors on or around October 31, 2020; February 24,
2021; and March 9, 2021.
62. For example, one Micro-Cap Program APMA dated March 9, 2021
stated: “[y]our investment is protected at all times,” and “at no time will
the ‘Assets’ ever be placed at risk of loss...during the course of investment, trading
or profits distribution.”
63. Borg Bank’s Micro-Cap Program APMAs further represented that the
investments would double their principal in 30 days. For example, in a Micro-Cap
Program APMA sent to an investor on or around March 9, 2021, Borg Bank,
through Bailey, represented the following, among other representations:

64. The statements regarding the risk-free nature of the investments and
expected doubling of returns were false and misleading when made because Borg
Bank, through Bailey, (1) had misappropriated and misused the Micro-Cap

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Program investor money by directing it to Borg Bank’s and Bailey’s own uses; (2)
had directed investor funds to Bailey personally, to support his other businesses,
and to pay earlier investors (i.e., Ponzi payments), which created a risk of non-
payment of principal; (3) had taken few steps to facilitate any gold or diamond
deals of the type represented to investors; and (4) failed to disclose that Bailey and
Borg Bank had never profited beyond a few thousand dollars in prior diamond
transactions and never in gold transactions, making it unlikely or impossible to pay
the doubling of principal represented in 30 days.
65. The above false and misleading statements as to the risk-free nature
and expected returns on investment were material to investors and potential
investors because the assurance that an investor could not lose any of their
principal would be important to any reasonable investor. In addition, the promise
of substantial returns, including multiples of the initial investment, would have
been important to investors who sought to grow the principal of their investment
and obtain gains.
C. Bailey and Borg Bank Acted with Scienter.
66. Bailey knew or was reckless in not knowing, and should have known,
that his statements on behalf of Borg Bank regarding the use of investor funds, the
risk of loss and expected returns, and their compensation were false and misleading
when made.

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67.   Bailey knew that none of the SBLC investments contemplated in the
SBLC Program could close because Borg Bank, through Bailey, did not use the
money to pay the full upfront fees to other financial institutions that Borg Bank,
through Bailey, said were the basis for raising investor funds. Similarly, Bailey
knew that none of the gold and diamond investments in the Micro-Cap Program
had ever returned double or triple profits using investor money.
68. With respect to both the SBLC Program and the Micro-Cap Program,
Bailey knew that investor funds would be used to repay earlier investors and to pay
for Bailey’s personal expenses because Bailey knew about the purchases he made
on his own behalf. For those investor funds that Bailey directed to deposit funds in
Jones’s IOLTA account, Bailey gave disbursement directions to Jones and thus
knew he was misappropriating and misusing the investors’ funds.
69. Bailey also knew he would compensate himself and Borg Bank using
investor funds regardless of whether Borg Bank successfully “monetized” any
SBLCs or completed any gold or diamond deals.
70. Throughout the Relevant Period, Bailey exercised exclusive control
over Borg Bank, was acting within the scope of his authority to make
representations on behalf of Borg Bank, and did in fact make the representations
described above on behalf of Borg Bank.
71. The scienter of Bailey is imputed to Borg Bank.

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D. Bailey and Borg Bank Are Each Liable for Their False and
Misleading Statements.
72. All of the false and misleading statements detailed above were made
in connection with the offer, purchase, or sale of securities issued by Borg Bank,
specifically, the SBLC Program and Micro-Cap Program securities.
73. Bailey determined the content of, and had ultimate authority over, any
written materials used to solicit prospective SBLC Program and Micro-Cap
Program investors, and Bailey made or directed each false and misleading
statement detailed above. Additionally, Bailey signed the APMAs on behalf of
Borg Bank, and the documents on their face can be attributed to Bailey and Borg
Bank.
E. Bailey and Borg Bank Obtained Money or Property from Their
Misconduct.
74. Bailey and Borg Bank each obtained money by means of the false and
misleading statements detailed above.
75. During the Relevant Period, Borg Bank received more than $1.6
million in funds from investors from the sale of investments in the SBLC and
Micro-Cap Programs.
76. Bailey also received compensation and diverted money from investor
funds for his own, non-Borg Bank related uses.

26
 
V. BORG BANK, THROUGH BAILEY, ENGAGED IN DECEPTIVE
CONDUCT TO DEFRAUD INVESTORS.
77. Borg Bank, through Bailey, engaged in deceptive acts and practices to
defraud investors in connection with the offer and sale of securities described
above.
78. In addition to the false and misleading statements identified above,
Borg Bank, through Bailey, engaged in other deceptive conduct.
79. Borg Bank, through Bailey, misappropriated and misused investor
funds by, among other things, using them to pay for Bailey’s personal expenses and
to repay earlier investors.
80. For example, one SBLC Program investor deposited $118,000 into
Jones’s IOLTA account on December 7, 2020, as part of an SBLC Program
investment. Bailey sent the investor an invoice showing that his $118,000 would be
used to pay SWIFT fees (i.e., bank transfer fees) to pay a German bank to secure
an SBLC. Two days after the money was deposited, Bailey directed Jones to
disburse the funds as follows:
a. $47,500 to a company in California that was providing consulting and
IT services to another of Bailey’s companies, Borg Ethical Mining
Association, which had nothing to do with Borg Bank, SWIFT fees, or
SBLCs;

27
 
b. $20,000 to a partner of Bailey’s in a prisoner rehabilitation company;
and
c. $49,707 to Relief Defendant Borg Global, which Bailey used to buy
$3,000 in furs and over $2,000 in furniture, to pay his personal credit
cards, and to transfer thousands of dollars to his personal bank
account.
81. As another example, on September 24, 2021, after an SBLC Program
investor sent $25,000 to Borg Bank via Jones’s IOLTA account, Bailey directed
Jones to deposit $13,000 of this investor’s money into Bailey’s personal bank
account. Bailey then withdrew $3,000 in cash, made hundreds of dollars of
payments to various credit cards, paid over a hundred dollars to an online retailer,
made recurring payments for personal technology, and made payments to
purported gold and diamond consultants, but used none of this investor’s money
towards any SBLC-related investment or fee.
82. With respect to the Micro-Cap Program, in March 2021, three Micro-
Cap Program investors deposited approximately $96,000 into Borg Global’s bank
account, where Bailey directed the majority of Micro-Cap investors to deposit their
money. The first two investors deposited approximately $71,000, of which $34,000
went to a law firm representing Bailey in a personal real estate transaction that
never closed; approximately $2,700 went to Bailey’s personal account that he

28
 
shared with his wife; $2,000 went to a personal loan to an individual consultant for
Borg Bank; $3,500 went to other of Bailey’s companies; and $23,000 went to
foreign individuals and entities purportedly involved in gold and diamond
transactions. The third investor deposited $25,000. Of that, $10,000 went to repay
an earlier Micro-Cap Program investor; $12,500 went to individuals or entities
purportedly involved in gold or diamond deals; $700 went to Bailey’s personal
account; several hundred dollars went to pay Bailey’s credit cards; and $150 was
spent on dining.
83. As stated above, Borg Bank, through Bailey, disseminated statements
to investors and potential investors that Bailey, and thus Borg Bank, knew were
false.
84. As part of its inducements to investors and after fraudulently inducing
investors to invest in the SBLC and Micro-Cap Programs, Borg Bank, through
Bailey, undertook acts to prevent investors from discovering the truth about the
fraudulent scheme.
85. In order to prevent investors from learning that Borg Bank had not
invested money in the programs as represented, Borg Bank, through Bailey, used
new investor funds to make Ponzi payments to existing investors seeking the return
of their investment. At the time Borg Bank, through Bailey, made various
payments to existing investors, Borg Bank had no income and often did not have

29
 
sufficient assets from sources other than new investor money to make the
payments.
86. In order to assuage investors that their money was being managed and
handled responsibly, Bailey engaged Jones, an attorney, as a “paymaster” and
directed most investors to make their payments to Jones’s firm’s IOLTA account.
VI. JONES AIDED AND ABETTED BAILEY AND BORG BANK’S
FRAUD.
87. Jones was actively involved in Bailey and Borg Bank’s fraud and
provided substantial assistance to the fraud. Throughout the Relevant Period, Jones
received investor funds, made payments of those funds as directed by Bailey, and
retained a portion of the funds as compensation. Before providing services to
Bailey, Jones performed a background check on him and discovered Bailey’s prior
felony conviction.
88. Although the money he received came from investors, Jones took and
executed on unilateral instructions from Bailey regarding the funds he received.
89. Jones performed these services for the SBLC Program investors and
for at least one of the Micro-Cap Program’s investors during the Relevant Period.
90. Jones was aware that having an attorney receive money on behalf of
Borg Bank created the appearance of a financial intermediary who was subject to
oversight from a disciplinary authority, namely a state bar. Jones himself believed

30
 
that Borg Bank’s investors felt more comfortable investing with Borg Bank by
entrusting their money to an attorney.
91. Jones did not conduct due diligence on Borg Bank’s investors other
than to ensure they were not included in the Office of Foreign Assets Control’s
sanctions list, a list of foreign individuals and entities who have violated or
attempted to violate U.S. sanctions.
92. Jones took a fee of between approximately .5% and 1.0%, with certain
dollar minimums, per investor deposit for his services. Neither Jones, Bailey, nor
anyone else ever disclosed Jones’s fee to investors.
93. After taking his “paymaster” fee, Jones would disburse the funds
according to Bailey’s instructions. Bailey had the sole authority to direct where
investor money went, and Jones did not disburse investor money without Bailey’s
authorization.
94. Jones did not know whether Bailey’s disbursement instructions were
proper under any investment arrangement and chose not to ask Bailey about the
investment arrangements.
95. Jones received many of the APMAs described above that governed the
investment arrangements for the SBLC and Micro-Cap Programs. Jones also
maintained a detailed ledger purporting to track all deposit and disbursement
activity related to Bailey and Borg Bank for each year he performed services for

31
 
them. Despite this, Jones did not review any of the APMAs to confirm that his
receipt and disbursement of investor funds was consistent with Borg Bank’s
commitments. Rather, Jones took Bailey’s word that the money was disbursed
properly.
96. By at least November 2019 and continuing through December 2022,
Jones received complaints from Borg Bank’s investors, many of whom specifically
alleged that Borg Bank or Bailey had committed fraud and that Jones was
complicit in that fraud. Multiple investors provided Jones with details of the
promised investments and supporting documentation.
97. For example, on November 8, 2019, an individual identifying himself
as an early investor and referral agent sent an email to Bailey with copy to Jones,
among others. In the email, the investor asked Bailey to “find [it] in [his] heart to
pay...all 3 clients [the investor/referral agent] introduced to the Firm.” The
individual further wrote that he “receive[d] their calls repeatedly asking for
recovery of their money invested along with the interest attached to them.”
98. In or about January 2021, Jones received an email titled “FRAUD by
your TRUST ACCOUNT” from an SBLC Program investor accusing Jones of
using his IOLTA account to facilitate Bailey and Borg Bank’s fraud.

32
 
99. In August 2022, another SBLC Program investor told Jones that
Bailey was using Jones’s role as an attorney “to create assurance and peace of
mind with Clients/victims [sic]...which assurances are of course all fake.”
100. In another August 2022 email to Jones, titled “Roosevelt Bailey the
FRAUD,” an SBLC Program investor recommended that investors copied on the
email report Jones to the Florida Bar Association for “assisting this fraud.”
101. Jones did not respond to the investors who emailed him alleging
fraud. Instead, Jones forwarded their complaints to Bailey. On one or more
occasions, Bailey told Jones, in sum and substance, that Bailey intended to make
the complaining investors whole. Despite having access to information about
Bailey and Borg Bank’s finances and investors, Jones took no steps to confirm
Bailey’s statements, to confirm whether Borg Bank repaid the investors, or to
directly address complaints with individuals who contacted him.
102. Jones continued to accept investor money on behalf of Borg Bank
through October 2022 (and was willing to do so through December 2022), and to
direct the money at Bailey’s direction in furtherance of the above-described
fraudulent scheme.
103. In mid-2020, after receiving investor complaints, Jones raised his fees
from .5% to .65%, or a minimum of $250, per investor deposit, citing to Bailey
that he had learned Bailey may be under a federal criminal investigation.

33
 
104. In 2022, Jones again raised his “paymaster” fees to 1%, or a minimum
of $1,000, per investor deposit, citing the increased workload due to investor
complaints.
105. On or about April 16, 2022, Jones informed Bailey by text message
that he was increasing his fees due to the “repeated threats of bar complaints,
lawsuits, [and] criminal investigations. . . .” Jones further wrote, “Remember, when
the FBI came to interview me regarding the one incident, they recognized your
name and expressed concern about my working with you, which tells me that those
threats have not been mere lip service despite my own efforts to reassure each
complaining investor. . . .”
106. In July 2022, a large U.S. financial institution closed the IOLTA
account of Jones’s law firm after an investor reported to that bank that Borg Bank’s
investment schemes were a fraud.
107. However, in June 2022, shortly before the account was closed, Jones
opened a new account at a different U.S. financial institution and continued to
receive and disburse funds on Bailey’s behalf through October 2022.
108. On December 15, 2022, Jones terminated his relationship with Bailey
and Borg Bank “due to the recent frequency of concerns expressed by your
associates about your performance of agreements involving funds transferred to
you using my services.”

34
 
109. Between November 2019, when Jones first received an investor
complaint about Bailey, and the time Jones terminated his relationship with Bailey
in December 2022, approximately $1.4 million in Borg Bank-related investor funds
passed through the IOLTA account of Jones’s law firm, and Jones took
approximately $14,000 in fees.
110. In the face of the numerous “red flags” and suspicious events that
should have alerted him to Bailey and Borg Bank’s improper conduct, Jones
knowingly or recklessly provided substantial assistance to Bailey and Borg Bank’s
fraudulent conduct by allowing investor money to flow through his law firm’s
IOLTA account, disbursing the money at Bailey’s direction, and lending the
imprimatur of his law firm to Bailey and Borg Bank’s unlawful enterprise.
VII. BORG GLOBAL RECEIVED PROCEEDS FROM BAILEY AND
BORG BANK’S FRAUD TO WHICH IT HAS NO LEGITIMATE
CLAIM.
111. During the Relevant Period, Borg Global received at least $163,000
from Borg Bank’s investors.
112. This money constituted the proceeds of, or was traceable to the
proceeds of, Bailey and Borg Bank’s violations of the securities laws.
113. Borg Global has no legitimate claim to the investor money.

35
 
114. Borg Global did not provide any reciprocal services that would entitle
it to payment from investor funds.
115. The funds should be returned to defrauded investors.
CLAIMS FOR RELIEF
FIRST CLAIM FOR RELIEF
Section 10(b) and Rule 10b-5 of the Exchange Act
(Bailey and Borg Bank)

116. The SEC realleges and incorporates by reference in this claim for
relief the allegations set forth above.
117. Bailey and Borg Bank, directly or indirectly, in connection with the
purchase or sale of a security, and by the use of means or instrumentalities of
interstate commerce, of the mails, or of the facilities of a national securities
exchange, knowingly or severely recklessly: (a) employed devices, schemes, or
artifices to defraud; (b) made untrue statements of a material fact or omitted to
state a material fact necessary in order to make the statements made, in the light of
the circumstances under which they were made, not misleading; and (c) engaged in
acts, practices, or courses of business which operated or would operate as a fraud
or deceit upon other persons.
118. By engaging in the conduct described above, Bailey and Borg Bank
violated, and unless restrained and enjoined will continue to violate, Section 10(b)

36
 
of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. §
240.10b-5].
SECOND CLAIM FOR RELIEF
Section 17(a) of the Securities Act
(Bailey and Borg Bank)

119. The SEC realleges and incorporates by reference in this claim for
relief the allegations set forth above.
120. Bailey and Borg Bank, directly or indirectly, in the offer or sale of
securities by the use of means or instruments of transportation or communication
in interstate commerce or by use of the mails, acting with the requisite state of
mind: (a) employed devices, schemes, or artifices to defraud; (b) obtained money
or property by means of one or more untrue statements of a material fact or by
omitting to state a material fact necessary in order to make the statements made, in
light of the circumstances under which they were made, not misleading; and (c)
engaged in transactions, practices, or courses of business which operated or would
operate as a fraud or deceit upon the purchaser.
121. By virtue of the foregoing, Bailey and Borg Bank, directly or
indirectly, violated and, unless restrained and enjoined, will again violate Section
17(a) of the Securities Act [15 U.S.C. § 77q(a)].

37
 
THIRD CLAIM FOR RELIEF
Aiding and Abetting Violations of the Exchange Act
Section 10(b) and Rule 10b-5 Thereunder and Securities Act Section 17(a)
(Jones)

122. The SEC realleges and incorporates by reference in this claim for
relief the allegations set forth above.
123. Bailey and Borg Bank violated Section 10(b) of the Exchange Act [15
U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5] and Section
17(a) of the Securities Act [15 U.S.C. § 77q(a)].
124. As a result of the conduct alleged herein, between November 2019
and December 2022, Jones aided and abetted Bailey and Borg Bank’s violations of
the Exchange Act and the Securities Act by knowingly or recklessly providing
substantial assistance to Bailey and Borg Bank in furtherance of those violations.
125. By virtue of the foregoing, Jones, directly or indirectly, aided and
abetted and, unless enjoined, will again aid and abet violations of Section 10(b) of
the Exchange Act [15 U.S.C. § 78j(b)], Rule 10b-5 thereunder [17 C.F.R. §
240.10b-5], and Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)].
FOURTH CLAIM FOR RELIEF
Disgorgement from Relief Defendant – Pursuant to Sections 21(d)(3), (5) and
(7) of the Exchange Act and Equitable Principles
(Relief Defendant Borg Global)

126. The SEC realleges and incorporates by reference in this claim for
relief the allegations set forth above.

38
 
127. Borg Global obtained money, property, and assets that are the
proceeds, or are traceable to the proceeds, of the fraud and violations of the
securities laws by Bailey and Borg Bank.
128. Borg Global has no legitimate claim to these illicit proceeds or assets,
having obtained the funds under circumstances in which it is not just, equitable, or
conscionable for it to retain the funds or assets, and therefore it has been unjustly
enriched. Borg Global should be required to disgorge all such ill-gotten gains.  [15
U.S.C. §§ 78u(d)(3), (5), and (7) and equitable principles].
PRAYER FOR RELIEF

WHEREFORE, the SEC seeks the following relief:

1. Find that the Defendants committed the violations alleged in this
Complaint;
2. Enter an injunction, in a form consistent with Rule 65 of the Federal
Rules of Civil Procedure, permanently restraining and enjoining Defendants and
their agents, servants, employees, attorneys, and accountants, and those persons in
active concert or participation with them, who receive actual notice of the Final
Judgment by personal service or otherwise, and each of them, from engaging in
transactions, acts, practices, and courses of business described herein, and from
engaging in conduct of similar purport and object in violation of Section 17(a) of

39
 
Securities Act [15 U.S.C. § 77q(a)] and Section 10(b) of the Exchange Act [15
U.S.C. § 78j(b)] and Exchange Act Rule 10b-5 [17 C.F.R. § 240.10b-5] thereunder;
3. Enter an injunction, in a form consistent with Rule 65(d) of the
Federal Rules of Civil Procedure, permanently restraining and enjoining Bailey
from directly or indirectly, including, but not limited to, through any entity owned
or controlled by him, participating in the issuance, purchase, offer, or sale of any
security, provided, however, that such injunction shall not prevent Bailey from
purchasing or selling securities for his own personal account;
4. Enter an injunction, in a form consistent with Rule 65(d) of the
Federal Rules of Civil Procedure, permanently restraining and enjoining Jones
from directly or indirectly, including, but not limited to, through any entity owned
or controlled by him, participating in, including acting as a “paymaster” in
connection with, the issuance, purchase, offer, or sale of any security, provided,
however, that such injunction shall not prevent Jones from purchasing or selling
securities for his own personal account;
5. Order Defendants and Relief Defendant to disgorge all ill-gotten gains
received during the period of the violative conduct, plus prejudgment interest
thereon, pursuant to the Court’s equitable powers and Sections 21(d)(3), 21(d)(5),
and 21(d)(7) of the Exchange Act [15 U.S.C. §§ 78u(d)(3), 78u(d)(5), and
78u(d)(7)];

40
 
6. Order Defendants to pay civil money penalties pursuant to Section
20(d) of the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the
Exchange Act [15 U.S.C. § 78u(d)(3)];
7. Enter an order pursuant to Section 20(e) of the Securities Act [15
U.S.C. § 77t(e)] and Section 21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)]
prohibiting Bailey from acting as an officer or director of any issuer that has a class
of securities registered pursuant to Section 12 of the Exchange Act (15 U.S.C. §
78l), or that is required to file reports pursuant to Section 15(d) of the Exchange
Act (15 U.S.C. § 78o(d)); and
8. Grant such other and further relief as the Court may deem just and
proper.

41
 
JURY DEMAND

The SEC demands a trial by jury on all claims so triable.

Dated:  Jul
y 25, 2024  Respectfully submitted,

                                                        By:                                                        /s/ James P. McDonald
          James         P.         McDonald         (NY Bar No. 4823910)
Jacqueline Moessner (NY Bar No. 4456521)
Rachel E. Yeates (CO Bar No. 45759)
U.S. Securities and Exchange Commission
1961 Stout Street, Suite 1700
Denver, CO 80294-1961
Telephone: (303) 844-1000
Email:     [email protected]
                [email protected]

       [email protected]

Attorneys for Plaintiff
U.S. Securities and Exchan
ge Commission

1 
 

IN THE UNITED STATES DISTRICT COURT 
NORTHERN DISTRICT OF GEORGIA 

ATLANTA DIVISION 
 
Civil Action No. 
 
UNITED STATES SECURITIES AND   
EXCHANGE COMMISSION, 
 
 Plaintiff, 
 
v.  
 
ROOSEVELT TOBIAS BAILEY, 
BORG INVESTMENT BANK &  
CAPITAL TRUST, and   
ALVIN CHRISTOPHER JONES, 
 
 Defendants, and 
 
BORG GLOBAL HOLDINGS, LLC, 
 
 Relief Defendant.  
 
 

COMPLAINT AND JURY DEMAND 
 
 

Plaintiff, United States Securities and Exchange Commission (“SEC”), for 

its Complaint against Defendants Roosevelt Tobias Bailey (“Bailey”), Borg 

Investment Bank & Capital Trust (“Borg Bank”), and Alvin Christopher Jones 

(“Jones”) (collectively, “Defendants”) and Relief Defendant Borg Global Holdings, 

LLC (“Borg Global” or “Relief Defendant”), alleges: 

 

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2 
 

INTRODUCTION 
 

1. Through an entity called Borg Bank, Bailey raised approximately $1.6 

million by offering and selling fraudulent investments to the public on the promise 

of astronomical returns obtainable over short periods of time with little or no risk 

of principal loss to investors. Contrary to these representations, investors never 

received their promised returns and most lost all of their investment while Bailey 

profited.   

2. Borg Bank, through Bailey, offered and sold two types of investment 

contracts under this guise: one in which an investor would front fees to supposedly 

“lease” and “monetize” high-value purported bank instruments called standby 

letters of credit (“SBLC”) and another where investors’ money would be pooled 

and invested in supposedly lucrative gold and diamond investments in Africa and 

South America.   

3. In reality, Borg Bank never leased or monetized SBLCs as it said it 

would and it obtained only a few precious stones that Bailey sold for minimal 

profit. Instead, substantial amounts of investors’ funds were directed to Bailey’s 

personal benefit, including to buy him furs and furniture, pay his credit card bills, 

and pay fees for his personal real estate deals that never closed. Of the 

approximately $1.6 million raised, Bailey disbursed or directed to be disbursed at 

least $410,000 for his benefit, either transferring investor money to his own bank 

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3 
 

accounts or making payments to third parties for his benefit, sent at least $163,000 

to an account for another company he controlled, Relief Defendant Borg Global, 

and made approximately $250,000 in Ponzi payments to earlier investors.    

4. As part of the scheme, Bailey directed the majority of investors to 

send their investments to an Interest on Lawyer’s Trust Account (“IOLTA”) held by 

Defendant Jones, an attorney and former Florida prosecutor, who disregarded 

numerous red flags as he provided substantial assistance to Bailey and Borg Bank’s 

fraud. Jones received numerous investor complaints that Bailey and Borg Bank 

were engaged in fraud or misusing the money that Jones was collecting on their 

behalf, yet Jones continued to facilitate the scheme’s financial transactions and 

collect fees for that work.  

5. By engaging in this conduct, Bailey and Borg Bank violated Section 

17(a) of the Securities Act of 1933 (“Securities Act”), 15 U.S.C. § 77q(a), Section 

10(b) of the Securities Exchange Act of 1934 (“Exchange Act”), 15 U.S.C. 

§ 78j(b), and Exchange Act Rule 10b-5 thereunder, 17 C.F.R. § 240.10b-5 (13 FR 

8183, Dec. 22, 1948, as amended at 16 FR 7928, Aug. 11, 1951). For his part, 

Jones aided and abetted Bailey and Borg Bank’s violations of Section 17(a) of the 

Securities Act, 15 U.S.C. § 77q(a), Section 10(b) of the Exchange Act, 15 U.S.C. 

§ 78j(b), and Exchange Act Rule 10b-5 thereunder, 17 C.F.R. § 240.10b-5. Unless 

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4 
 

restrained and enjoined, Defendants will continue to violate the federal securities 

laws. 

DEFENDANTS 

6. Borg Bank is a Washington, D.C. statutory trust formed on October 

26, 2018, with its principal place of business in Duluth, Georgia. Bailey is the 

chairman, president, CEO, and sole managing trustee of Borg Bank, which has no 

other employees.  

7. Bailey, age 67, is a resident of Buford, Georgia. In addition to Borg 

Bank, Bailey owns and solely controls other corporate entities that use the “Borg” 

name, including Borg Global. In 2001, Bailey was convicted of felony copyright 

infringement and tax evasion. 

8. Jones, age 55, is a resident of Tampa, Florida. Jones is an attorney 

licensed in Florida and a former state prosecutor. During the relevant period, he 

owned and managed his own firm, Alvin C. Jones, P.A. 

RELIEF DEFENDANT 

9. Borg Global is a Georgia limited liability company formed on 

September 25, 2017. Bailey solely owns and controls Borg Global, which received 

at least $163,000 in misappropriated investor funds. 

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5 
 

JURISDICTION AND VENUE 

10. The SEC brings this action pursuant to authority conferred on it by 

Sections 20(b), 20(d)(1), and 20(e) of the Securities Act [15 U.S.C. §§ 77t(b), 

77t(d)(1), and 77t(e)] and Sections 21(d)(1), (2), (3), (5) and (7), and 21(e) of the 

Exchange Act [15 U.S.C. §§ 78u(d)(1), (2), (3), (5), and (7) and 78u(e)] to restrain 

and enjoin the Defendants from engaging in the acts, practices, and courses of 

business described in this Complaint and similar acts, practices, and courses of 

business. The SEC seeks permanent injunctions, disgorgement of ill-gotten gains 

derived from the conduct alleged in the Complaint plus prejudgment interest 

thereon, and civil penalties as well as an officer and director bar against Bailey. 

The SEC also seeks disgorgement of ill-gotten gains plus prejudgment interest 

thereon from the Relief Defendant. 

11. Defendants, directly or indirectly, singly and in concert, made use of 

the means or instruments of transportation or communications in interstate 

commerce, the means or instrumentalities of interstate commerce, or of the mails, 

in connection with the transactions, acts, practice, and courses of business alleged 

in this Complaint, certain of which occurred within this District. 

12. This Court has jurisdiction over this action pursuant to Sections 20(b), 

20(d)(1), 20(e), and 22(a) of the Securities Act [15 U.S.C. §§ 77t(b), 77t(d)(1), 

77t(e) and 77v(a)], and Sections 21(d)(1), (2), (3), (5), and (7), 21(e), and 27(a) of 

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6 
 

the Exchange Act [15 U.S.C. §§ 78u(d)(1), (2), (3), (5), and (7), 78u(e), and 

78aa(a)].  

13. Venue is proper in the Northern District of Georgia pursuant to 

Section 22(a) of the Securities Act [15 U.S.C. § 77v(a)] and Section 27(a) of the 

Exchange Act [15 U.S.C. § 78aa(a)] because certain of the acts and transactions 

constituting violations of the Securities Act and the Exchange Act occurred in this 

District, including the offer and sale of securities and the misappropriation of 

investor funds through transactions at banks located in this District. In addition, 

Bailey resides and transacts business in, and Borg Bank’s principal place of 

business is in, this District. 

14. On or about September 13, 2023, Bailey and Borg Bank agreed to toll 

the statute of limitations from September 13, 2023 through June 11, 2024. On or 

about April 19, 2024, Bailey and Borg Bank agreed to further toll the statute of 

limitations for the period of June 12, 2024 through September 10, 2024. 

FACTUAL ALLEGATIONS 

I. BAILEY OPERATED AND CONTROLLED BORG BANK. 

15. Bailey formed Borg Bank on October 26, 2018. Bailey was the 

chairman, president, CEO, and sole managing trustee of Borg Bank. Borg Bank 

had no other directors, officers, or trustees, did not carry out any traditional 

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7 
 

banking operations, was not chartered as a bank with any state, and was not 

registered with the SEC in any capacity.   

16. From at least November 2018 through in or about October 2022 (“the 

Relevant Period”), Borg Bank, through Bailey, developed and marketed investment 

programs. The primary investment program Borg Bank marketed is generally 

referred to as a “high-yield” or “prime bank” investment through which clients 

could have their assets invested at Borg Bank’s discretion based on Borg Bank’s 

representations that these investments would earn substantial returns over a short 

period of time with little or no risk.     

II. BORG BANK, THROUGH BAILEY, OFFERED AND SOLD 
SECURITIES. 

17. Borg Bank, through Bailey, solicited potential investors and promoted 

two investment programs through direct verbal communications, conference calls, 

and Zoom meetings, during in-person meetings, and through email and WhatsApp 

messages.  

18. Bailey used his own contacts and “referral agents” to identify 

potential investors.  

19.  Borg Bank, through Bailey, provided potential investors who 

expressed an interest in investing with an “Asset Placement and Management 

Agreement” (“APMA”) for a particular investment program, either the Standby 

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8 
 

Letter of Credit Investment Program (“SBLC Program”) or the Micro-Cap Wealth 

Investment Program (“Micro-Cap Program”).  

20. Those APMAs described the conditions under which Borg Bank 

purported it would take and use investor money for the promised investment 

schemes. As detailed below, these APMAs contained numerous false and 

misleading statements. In addition, under the APMAs, Borg Bank agreed to 

manage assets for trading or for “buy/sell investment purposes” and stated that 

Bailey had “full authority” over Borg Bank. The APMAs described Borg Bank as 

an entity involved in “global asset monetization,” “leverage,” and “global buy/sell 

trading activities.”   

21. Borg Bank, through Bailey, prepared APMAs for the SBLC Program 

and Micro-Cap Programs. Bailey sent the SBLC and Micro-Cap Program APMAs 

to investors, and investors signed the documents and returned them to Bailey. 

22. When an investor agreed to invest with Borg Bank, the investor and 

Bailey, as Borg Bank’s representative, signed an APMA that stated the investor’s 

money would be used for one of the investment programs described above.  

23. Bailey directed most Micro-Cap Program investors to transfer their 

funds to an account belonging to Relief Defendant Borg Global. Bailey directed 

other investors to transfer their funds to Jones’s law firm’s IOLTA account. Jones 

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then transferred the investors’ money, minus a fee for himself, pursuant to Bailey’s 

directions. 

24. Section 2(a)(1) of the Securities Act [15 U.S.C. § 77b(a)(1)] and 

Section 3(a)(10) of the Exchange Act [15 U.S.C. § 78c(a)(10)] define “security” to 

include any “investment contract.” 

25. Borg Bank, through Bailey, offered and sold securities in the form of 

investment contracts in the SBLC Program and the Micro-Cap Program. The 

financial success or failure of the SBLC and Micro-Cap Programs offered by Borg 

Bank, through Bailey, was inextricably tied to the efforts of Bailey and Borg Bank. 

Investors had no role in the management of Borg Bank, the SBLC Program, or the 

Micro-Cap Program, and they relied exclusively on Bailey to manage Borg Bank 

and its investment programs and to conduct their business affairs.  

26. The SBLC and Micro-Cap investment programs offered and sold by 

Borg Bank, through Bailey, were “securities” as defined in Section 2(a)(1) of the 

Securities Act and Section 3(a)(10) of the Exchange Act [15 U.S.C. §§ 77b(a)(1) 

and 78c(a)(10)]. 

III. BORG BANK’S INVESTMENT PROGRAMS 

A. SBLC Program 

27. Under the SBLC Program, Borg Bank, through Bailey, sought and 

obtained investor funds on the representation that those funds would be used to pay 

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fees to lease and “monetize” an SBLC from one or more large international banks. 

During the Relevant Period, Borg Bank, through Bailey, raised over $1.4 million 

from at least 20 investors through SBLC Program investment contracts. 

28. An SBLC is a type of bank guarantee that is issued by a bank and 

promises payment on behalf of another party when certain conditions are satisfied. 

As part of Borg Bank’s offerings, Bailey frequently employed the terms “standby 

letter of credit” and “SBLC,” as well as other banking-industry terminology. Using 

these terms as he did created the false appearance that Bailey was steeped in and 

had substantial experience in the financial industry, when he did not, and had 

access to sophisticated financial products, when he did not. During the Relevant 

Period, before soliciting investors for Borg Bank’s SBLC Program, Bailey and 

Borg Bank had never executed an SBLC transaction of the type offered as part of 

the SBLC Program.  

29. During the Relevant Period, Borg Bank, through Bailey, represented 

that investor funds could be used to acquire and “monetize” SBLCs. Borg Bank, 

through Bailey, represented that it would find a “monetizer,” a company that would 

use an SBLC as collateral against its own credit line to obtain a loan, retain some 

of the proceeds from that monetization, and give the rest of the proceeds to Bailey, 

Borg Bank, and their investors. Borg Bank, through Bailey, represented to 

investors they could earn up to 16 times their initial investment in as short as 30 to 

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90 days. In reality, at the time Borg Bank was raising investor funds, Bailey knew 

Borg Bank could never “monetize” an SBLC to generate the astronomical returns 

Bailey, on behalf of Borg Bank, represented to investors because Bailey knew that 

(1) neither Bailey nor Borg Bank had ever successfully leased or “monetized” an 

SBLC with investor money, (2) Borg Bank, through Bailey, had misappropriated or 

misused nearly all investor money raised through the SBLC Program, and (3) Borg 

Bank, through Bailey, had used barely any investor money toward purported SBLC 

expenses. 

B. Micro-Cap Program 

30. As detailed below, under the Micro-Cap Program, Borg Bank, through 

Bailey, sought and obtained investor funds by representing that such investments 

would be pooled and used to acquire gold and diamonds abroad, which they would 

later resell in the United States at a higher price. Borg Bank, through Bailey, raised 

approximately $230,000 from at least six investors from in or about October 2020 

through June 2021 through Micro-Cap Program investments. 

31. During the Relevant Period, Borg Bank, through Bailey, represented 

that the Micro-Cap Program would provide short-term doubling of principal 

without investment risk. In reality, Borg Bank made a miniscule profit from the 

sale of a small number of precious stones and misappropriated investor funds, and 

most investors lost all of their investment. 

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C. Borg Bank, Through Bailey, Misappropriated and Misused 
Investor Money. 

32. Borg Bank never monetized an SBLC and never engaged in the bulk 

purchase and resale of precious metals or stones. Instead, as alleged below, Borg 

Bank, through Bailey, used new investor money to make Ponzi payments to some 

early investors and directed substantial amounts of investors’ money to be used for 

Bailey’s personal benefit (including through transfers to Relief Defendant Borg 

Global), to buy furs and furniture, pay Bailey’s credit card bills, and pay for fees 

for personal real estate deals that never closed. 

33. Throughout the Relevant Period, Borg Bank, through Bailey, raised 

over $1.4 million from at least 20 investors in the SBLC Program. Borg Bank, 

through Bailey, used approximately $230,000 to pay earlier investors, sent at least 

approximately $163,000 to Relief Defendant Borg Global, misappropriated 

approximately $362,000, and used the remainder to pay for purported business 

operations.  

34. From at least in or about October 2020 through June 2021, Borg 

Bank, through Bailey, raised over $230,000 from six investors in the Micro-Cap 

Program, paid over $25,000 to earlier investors, misappropriated approximately 

$47,000, and used the remainder to pay for purported business operations. 

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IV. BORG BANK, THROUGH BAILEY, MADE FALSE AND 
MISLEADING STATEMENTS TO INVESTORS IN CONNECTION 
WITH BORG BANK’S SECURITIES OFFERINGS. 

35. In raising funds from investors in connection with the SBLC and 

Micro-Cap Programs, Borg Bank, through Bailey, made numerous written and oral 

materially false and misleading statements regarding, among other things, the use 

of investor funds, the “guaranteed” nature of the investments and magnitude of 

returns, or Bailey and Borg Bank’s compensation. 

A. Borg Bank, Through Bailey, Made False and Misleading 
Statements in Connection with the SBLC Program. 

36. In raising funds from investors in connection with the SBLC Program, 

Borg Bank, through Bailey, made numerous materially false and misleading 

statements regarding, among other things, the use of investor funds, the 

“guaranteed” nature of the investment and substantial expected returns, and Bailey 

and Borg Bank’s compensation being linked only to successful investments. 

1. Statements Regarding the Use of Investor Funds 

37. Borg Bank, through Bailey, made materially false and misleading 

statements in oral and written communications to investors and potential investors 

regarding the use of investors’ funds in the SBLC Program, including that investor 

money would be used to pay fees to lease or acquire an SBLC from an established 

bank.   

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38. Borg Bank’s SBLC Program APMAs stated that in return for investors 

providing a specified amount of investment principal “to participate in the 

facilitation, acquisition, delivery and monetization of a Borg Investment Bank 

secured and delivered…[SBLC] from” various well-known banks “for project 

funding/financing via Borg Investment Bank,” investors’ funds would be “assigned 

and transferred to Borg Investment Bank and/or its nominated financial partners 

for asset management and SBLC acquisition activities.” In exchange, “[Borg Bank] 

will provide [the investor] with rated and non-rated Bank Issued [sic] SBLC 

monetization packages and specialized financial deals.” Borg Bank, through 

Bailey, represented that profits would stem “from monetization cash flows created” 

in connection with the leased SBLC.  

39. Borg Bank, through Bailey, made these or substantially similar 

representations in SBLC Program APMAs sent to investors and potential investors, 

including on or about November 21, 2018; February 3, 2021; July 15, 2021; 

August 4, 2021; September 4, 2021; September 23, 2021; October 6, 2021; April 

21, 2022; and October 7, 2022. 

40. Borg Bank, through Bailey, made similar representations to investors 

regarding the use of funds by phone in or around March 2021 and during in-person 

meetings in New Jersey and New York in or around May 2021 and July 2021. 

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41. The above statements regarding use of funds to acquire SBLCs were 

false and misleading when made because Borg Bank, through Bailey, (1) had used 

only a small percentage of investor funds toward SBLC-related expenses; (2) had 

immediately misappropriated or misused SBLC Program investor funds by, among 

other things, paying earlier investors (i.e., Ponzi payments), paying Bailey or 

Relief Defendant Borg Global, and paying purported gold and diamond vendors; 

(3) had taken few steps to lease or monetize any SBLC; and (4) did not disclose 

that neither Bailey nor Borg Bank had successfully “monetized” any SBLCs. 

42. The above false and misleading statements regarding the use of 

investors’ funds were material to investors and potential investors because, among 

other things, the returns Borg Bank, through Bailey, promised investors were tied 

to the deployment of investor funds to lease and monetize SBLCs and to generate 

the substantial returns Borg Bank, through Bailey, had promised to investors.   

2. Statements Regarding Investment Risks and Returns 

43. During the Relevant Period, Borg Bank, through Bailey, made 

materially false and misleading statements in oral and written communications 

regarding the risk-free nature of the SBLC Program investments and the substantial 

expected returns on these supposedly risk-free investments. 

44. Borg Bank’s SBLC Program APMAs repeatedly stated that investor 

funds would never be at risk. For example, on or about November 21, 2018, Bailey 

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sent an investor an SBLC Program APMA which stated, in part: “[a]t no time will 

the ‘Assets’ ever be placed at risk of loss . . . during the course of investment, 

trading, or profits distribution.” 

45. Another SBLC APMA sent to an investor on or about April 21, 2022, 

stated, in part: “Borg Investment Bank will provide a guarantee . . . for the amount 

of the $125,000 investment from [investor], which guarantees that in the event 

where BORG [sic] Investment Bank does NOT succeed in the issuing and 

monetization of the SBLC as meant herein, BORG [sic] Investment Bank will 

repay the investment amount of $125,000. . . .” 

46. Additionally, Borg Bank, through Bailey, represented orally and in the 

SBLC Program APMAs that investors would receive returns of up to 16 times an 

investor’s principal in a matter of months. For example, on or about August 4, 

2021, Bailey sent an investor an SBLC Program APMA that represented their 

$50,000 investment would turn into $800,000 in just over a few months and which 

included the following asset description and payment schedule, among other 

representations: 

 

 

 

 

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 . . .  

 
 
47. The statements regarding the risk of loss and expected returns were 

false and misleading when made because Borg Bank, through Bailey, (1) had 

misappropriated and misused the SBLC Program investor funds immediately after 

receiving the funds and relied on new investor funds to pay earlier investors (i.e., 

Ponzi payments); (2) had directed investor funds to Bailey personally or to Relief 

Defendant Borg Global, which created a likelihood of non-payment for new 

investors; (3) failed to disclose that neither Bailey nor Borg Bank had ever 

successfully “monetized” any SBLCs; and (4) failed to disclose that Borg Bank did 

not intend to use investor funds to “monetize” or lease any SBLC.    

48. The above false and misleading statements as to the risk-free nature of 

the investments and substantial expected returns on investment were material to 

investors and potential investors because the assurance that an investor could not 

lose any of their principal would be important to any reasonable investor. In 

addition, knowing that the promise of substantial returns, including multiples of an 

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initial investment, was not guaranteed, was not likely, and had never occurred 

before would have been important to investors who sought to grow the principal of 

their investment and obtain gains. 

3. Statements Regarding Bailey and Borg Bank’s 
Compensation  

49. Borg Bank, through Bailey, also made material misrepresentations 

with respect to their compensation from SBLC Program investments.  

50. On or around July 15, 2021, August 4, 2021, and September 4, 2021, 

Bailey communicated to investors through the APMAs that he and Borg Bank were 

not being compensated for arranging the lease and monetization of SBLCs and 

would only be paid when they successfully monetized an SBLC and received 

profits.   

51. Similarly, Borg Bank’s SBLC Program APMAs contained payment 

schedules, usually titled “Annex,” that described to investors and potential 

investors the “profit distribution” of an SBLC Program investment. Those 

schedules did not disclose any payments from investor money for fees or 

compensation to Bailey or Borg Bank and instead represented that Borg Bank’s 

money would come from profits from an SBLC investment.    

52. The representations regarding Bailey and Borg Bank’s compensation 

were false and misleading when made because (1) Borg Bank, through Bailey, had 

immediately compensated itself and Bailey with investor money unrelated to a 

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successful monetization of an SBLC; (2) Bailey had directed payments to his and 

Borg Bank’s benefit from sources other than the profits of an SBLC Program 

investment, namely from investors’ principal; and (3) Borg Bank, through Bailey, 

did not disclose that it did not intend to monetize SBLCs from banks and would 

instead direct investor money to other purposes. 

53. The above false and misleading statements regarding Bailey and Borg 

Bank’s compensation were material to investors and potential investors because 

knowing that Bailey and Borg Bank would take a portion of investors’ principal as 

compensation and that Bailey and Borg Bank’s compensation was not solely 

dependent on the success of an investment would be important to any reasonable 

investor.   

B. Borg Bank, Through Bailey, Made False and Misleading 
Statements in Connection with the Micro-Cap Program. 

54. In raising funds from investors in connection with the Micro-Cap 

Program, Borg Bank, through Bailey, made numerous materially false and 

misleading statements regarding, among other things, the use of investor funds and 

the “guaranteed” nature of the investment and substantial expected returns. 

1. Statements Regarding the Use of Investor Funds 

55. From at least in or about October 2020 through June 2021, Borg 

Bank, through Bailey, made materially false and misleading statements in oral and 

written communications in connection with offering and selling investments in the 

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Micro-Cap Program about the use of investors’ funds, including that investors’ 

money would be used to effect gold and diamond deals—buying precious metals 

and stones in Africa and South America and selling them for a higher price in the 

United States—and that the profits would be shared with investors. 

56. In the Micro-Cap Program APMAs, Borg Bank, through Bailey, stated 

that investors’ funds would be “place[d] with Borg Investment Bank for investment 

participation purposes via various capital markets trading or buy/sell activities” 

and that investors “[made] these funds available to Borg Investment Bank for the 

purpose of a Micro-Cap Program Contract . . . or optional Gold or Diamond 

buy/sell Contract. . . .” Borg Bank, through Bailey, represented that “[a]s your 

Global Investment Banker, [we] will choose the best trading and buy/sell payout 

activities in utilizing your cash assets.” Borg Bank, through Bailey, made these or 

substantially similar representations in Micro-Cap Program APMAs sent to 

investors on or around October 31, 2020; February 24, 2021; and March 9, 2021. 

57. When offering the Micro-Cap Program, Borg Bank, through Bailey, 

also represented to at least two investors, both orally and in writing, including on 

or around October 31, 2020 and March 9, 2021, that investor money would be used 

for investments in gold and diamond transactions. 

58. The above false and misleading statements regarding the use of funds 

for investments for gold and diamond transactions were false and misleading when 

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made because Borg Bank, through Bailey, had misappropriated and misused 

investor funds immediately after it received them and had only used an 

insubstantial percentage of investor funds toward purported gold and diamond 

transactions. 

59. The above false and misleading statements regarding the use of 

investors’ funds for the Micro-Cap Program were material to investors and 

potential investors because, among other things, the returns Borg Bank, through 

Bailey, promised investors were tied to the gold and diamond transactions that 

Borg Bank represented they would effect and would have been needed to generate 

the returns Borg Bank had promised to investors. These false and misleading 

statements were also material to investors and potential investors because an 

investor would have understood that Borg Bank, through Bailey, was going to use 

their money in the way they described in the Micro-Cap Program APMAs and not 

for things unrelated to investments.  

2. Statements Regarding Investment Risks and Returns 

60. From at least in or about October 2020 through June 2021, Borg 

Bank, through Bailey, made materially false and misleading statements in oral and 

written communications in connection with offering and selling investments in the 

Micro-Cap Program by, among other ways, representing that investments were not 

at risk of loss and that investors would double their investment in 30 days.  

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61. Borg Bank, through Bailey, represented orally and in the Micro-Cap 

Program APMAs that investors’ money was guaranteed and would never be put at 

risk of loss. Borg Bank, through Bailey, made these representations in Micro-Cap 

Program APMAs sent to investors on or around October 31, 2020; February 24, 

2021; and March 9, 2021. 

62. For example, one Micro-Cap Program APMA dated March 9, 2021 

stated: “[y]our investment is protected at all times,” and “at no time will 

the ‘Assets’ ever be placed at risk of loss…during the course of investment, trading 

or profits distribution.” 

63. Borg Bank’s Micro-Cap Program APMAs further represented that the 

investments would double their principal in 30 days. For example, in a Micro-Cap 

Program APMA sent to an investor on or around March 9, 2021, Borg Bank, 

through Bailey, represented the following, among other representations: 

 
64. The statements regarding the risk-free nature of the investments and 

expected doubling of returns were false and misleading when made because Borg 

Bank, through Bailey, (1) had misappropriated and misused the Micro-Cap 

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Program investor money by directing it to Borg Bank’s and Bailey’s own uses; (2) 

had directed investor funds to Bailey personally, to support his other businesses, 

and to pay earlier investors (i.e., Ponzi payments), which created a risk of non-

payment of principal; (3) had taken few steps to facilitate any gold or diamond 

deals of the type represented to investors; and (4) failed to disclose that Bailey and 

Borg Bank had never profited beyond a few thousand dollars in prior diamond 

transactions and never in gold transactions, making it unlikely or impossible to pay 

the doubling of principal represented in 30 days.   

65. The above false and misleading statements as to the risk-free nature 

and expected returns on investment were material to investors and potential 

investors because the assurance that an investor could not lose any of their 

principal would be important to any reasonable investor. In addition, the promise 

of substantial returns, including multiples of the initial investment, would have 

been important to investors who sought to grow the principal of their investment 

and obtain gains. 

C. Bailey and Borg Bank Acted with Scienter.  

66. Bailey knew or was reckless in not knowing, and should have known, 

that his statements on behalf of Borg Bank regarding the use of investor funds, the 

risk of loss and expected returns, and their compensation were false and misleading 

when made. 

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67.   Bailey knew that none of the SBLC investments contemplated in the 

SBLC Program could close because Borg Bank, through Bailey, did not use the 

money to pay the full upfront fees to other financial institutions that Borg Bank, 

through Bailey, said were the basis for raising investor funds. Similarly, Bailey 

knew that none of the gold and diamond investments in the Micro-Cap Program 

had ever returned double or triple profits using investor money. 

68. With respect to both the SBLC Program and the Micro-Cap Program, 

Bailey knew that investor funds would be used to repay earlier investors and to pay 

for Bailey’s personal expenses because Bailey knew about the purchases he made 

on his own behalf. For those investor funds that Bailey directed to deposit funds in 

Jones’s IOLTA account, Bailey gave disbursement directions to Jones and thus 

knew he was misappropriating and misusing the investors’ funds.  

69. Bailey also knew he would compensate himself and Borg Bank using 

investor funds regardless of whether Borg Bank successfully “monetized” any 

SBLCs or completed any gold or diamond deals. 

70. Throughout the Relevant Period, Bailey exercised exclusive control 

over Borg Bank, was acting within the scope of his authority to make 

representations on behalf of Borg Bank, and did in fact make the representations 

described above on behalf of Borg Bank.  

71. The scienter of Bailey is imputed to Borg Bank. 

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D. Bailey and Borg Bank Are Each Liable for Their False and 
Misleading Statements. 

72. All of the false and misleading statements detailed above were made 

in connection with the offer, purchase, or sale of securities issued by Borg Bank, 

specifically, the SBLC Program and Micro-Cap Program securities. 

73. Bailey determined the content of, and had ultimate authority over, any 

written materials used to solicit prospective SBLC Program and Micro-Cap 

Program investors, and Bailey made or directed each false and misleading 

statement detailed above. Additionally, Bailey signed the APMAs on behalf of 

Borg Bank, and the documents on their face can be attributed to Bailey and Borg 

Bank.  

E. Bailey and Borg Bank Obtained Money or Property from Their 
Misconduct.  

74. Bailey and Borg Bank each obtained money by means of the false and 

misleading statements detailed above.  

75. During the Relevant Period, Borg Bank received more than $1.6 

million in funds from investors from the sale of investments in the SBLC and 

Micro-Cap Programs.   

76. Bailey also received compensation and diverted money from investor 

funds for his own, non-Borg Bank related uses.  

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V. BORG BANK, THROUGH BAILEY, ENGAGED IN DECEPTIVE 
CONDUCT TO DEFRAUD INVESTORS. 

77. Borg Bank, through Bailey, engaged in deceptive acts and practices to 

defraud investors in connection with the offer and sale of securities described 

above. 

78. In addition to the false and misleading statements identified above, 

Borg Bank, through Bailey, engaged in other deceptive conduct.  

79. Borg Bank, through Bailey, misappropriated and misused investor 

funds by, among other things, using them to pay for Bailey’s personal expenses and 

to repay earlier investors. 

80. For example, one SBLC Program investor deposited $118,000 into 

Jones’s IOLTA account on December 7, 2020, as part of an SBLC Program 

investment. Bailey sent the investor an invoice showing that his $118,000 would be 

used to pay SWIFT fees (i.e., bank transfer fees) to pay a German bank to secure 

an SBLC. Two days after the money was deposited, Bailey directed Jones to 

disburse the funds as follows:  

a. $47,500 to a company in California that was providing consulting and 

IT services to another of Bailey’s companies, Borg Ethical Mining 

Association, which had nothing to do with Borg Bank, SWIFT fees, or 

SBLCs;  

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b. $20,000 to a partner of Bailey’s in a prisoner rehabilitation company; 

and  

c. $49,707 to Relief Defendant Borg Global, which Bailey used to buy 

$3,000 in furs and over $2,000 in furniture, to pay his personal credit 

cards, and to transfer thousands of dollars to his personal bank 

account. 

81. As another example, on September 24, 2021, after an SBLC Program 

investor sent $25,000 to Borg Bank via Jones’s IOLTA account, Bailey directed 

Jones to deposit $13,000 of this investor’s money into Bailey’s personal bank 

account. Bailey then withdrew $3,000 in cash, made hundreds of dollars of 

payments to various credit cards, paid over a hundred dollars to an online retailer,  

made recurring payments for personal technology, and made payments to 

purported gold and diamond consultants, but used none of this investor’s money 

towards any SBLC-related investment or fee. 

82. With respect to the Micro-Cap Program, in March 2021, three Micro-

Cap Program investors deposited approximately $96,000 into Borg Global’s bank 

account, where Bailey directed the majority of Micro-Cap investors to deposit their 

money. The first two investors deposited approximately $71,000, of which $34,000 

went to a law firm representing Bailey in a personal real estate transaction that 

never closed; approximately $2,700 went to Bailey’s personal account that he 

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shared with his wife; $2,000 went to a personal loan to an individual consultant for 

Borg Bank; $3,500 went to other of Bailey’s companies; and $23,000 went to 

foreign individuals and entities purportedly involved in gold and diamond 

transactions. The third investor deposited $25,000. Of that, $10,000 went to repay 

an earlier Micro-Cap Program investor; $12,500 went to individuals or entities 

purportedly involved in gold or diamond deals; $700 went to Bailey’s personal 

account; several hundred dollars went to pay Bailey’s credit cards; and $150 was 

spent on dining. 

83. As stated above, Borg Bank, through Bailey, disseminated statements 

to investors and potential investors that Bailey, and thus Borg Bank, knew were 

false. 

84. As part of its inducements to investors and after fraudulently inducing 

investors to invest in the SBLC and Micro-Cap Programs, Borg Bank, through 

Bailey, undertook acts to prevent investors from discovering the truth about the 

fraudulent scheme.  

85. In order to prevent investors from learning that Borg Bank had not 

invested money in the programs as represented, Borg Bank, through Bailey, used 

new investor funds to make Ponzi payments to existing investors seeking the return 

of their investment. At the time Borg Bank, through Bailey, made various 

payments to existing investors, Borg Bank had no income and often did not have 

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sufficient assets from sources other than new investor money to make the 

payments. 

86. In order to assuage investors that their money was being managed and 

handled responsibly, Bailey engaged Jones, an attorney, as a “paymaster” and 

directed most investors to make their payments to Jones’s firm’s IOLTA account.   

VI. JONES AIDED AND ABETTED BAILEY AND BORG BANK’S 
FRAUD. 

87. Jones was actively involved in Bailey and Borg Bank’s fraud and 

provided substantial assistance to the fraud. Throughout the Relevant Period, Jones 

received investor funds, made payments of those funds as directed by Bailey, and 

retained a portion of the funds as compensation. Before providing services to 

Bailey, Jones performed a background check on him and discovered Bailey’s prior 

felony conviction. 

88. Although the money he received came from investors, Jones took and 

executed on unilateral instructions from Bailey regarding the funds he received.  

89. Jones performed these services for the SBLC Program investors and 

for at least one of the Micro-Cap Program’s investors during the Relevant Period.  

90. Jones was aware that having an attorney receive money on behalf of 

Borg Bank created the appearance of a financial intermediary who was subject to 

oversight from a disciplinary authority, namely a state bar. Jones himself believed 

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that Borg Bank’s investors felt more comfortable investing with Borg Bank by 

entrusting their money to an attorney. 

91. Jones did not conduct due diligence on Borg Bank’s investors other 

than to ensure they were not included in the Office of Foreign Assets Control’s 

sanctions list, a list of foreign individuals and entities who have violated or 

attempted to violate U.S. sanctions. 

92. Jones took a fee of between approximately .5% and 1.0%, with certain 

dollar minimums, per investor deposit for his services. Neither Jones, Bailey, nor 

anyone else ever disclosed Jones’s fee to investors.  

93. After taking his “paymaster” fee, Jones would disburse the funds 

according to Bailey’s instructions. Bailey had the sole authority to direct where 

investor money went, and Jones did not disburse investor money without Bailey’s 

authorization.  

94. Jones did not know whether Bailey’s disbursement instructions were 

proper under any investment arrangement and chose not to ask Bailey about the 

investment arrangements.  

95. Jones received many of the APMAs described above that governed the 

investment arrangements for the SBLC and Micro-Cap Programs. Jones also 

maintained a detailed ledger purporting to track all deposit and disbursement 

activity related to Bailey and Borg Bank for each year he performed services for 

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them. Despite this, Jones did not review any of the APMAs to confirm that his 

receipt and disbursement of investor funds was consistent with Borg Bank’s 

commitments. Rather, Jones took Bailey’s word that the money was disbursed 

properly.  

96. By at least November 2019 and continuing through December 2022, 

Jones received complaints from Borg Bank’s investors, many of whom specifically 

alleged that Borg Bank or Bailey had committed fraud and that Jones was 

complicit in that fraud. Multiple investors provided Jones with details of the 

promised investments and supporting documentation.  

97. For example, on November 8, 2019, an individual identifying himself 

as an early investor and referral agent sent an email to Bailey with copy to Jones, 

among others. In the email, the investor asked Bailey to “find [it] in [his] heart to 

pay…all 3 clients [the investor/referral agent] introduced to the Firm.” The 

individual further wrote that he “receive[d] their calls repeatedly asking for 

recovery of their money invested along with the interest attached to them.”  

98. In or about January 2021, Jones received an email titled “FRAUD by 

your TRUST ACCOUNT” from an SBLC Program investor accusing Jones of 

using his IOLTA account to facilitate Bailey and Borg Bank’s fraud.  

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99. In August 2022, another SBLC Program investor told Jones that 

Bailey was using Jones’s role as an attorney “to create assurance and peace of 

mind with Clients/victims [sic]…which assurances are of course all fake.”  

100. In another August 2022 email to Jones, titled “Roosevelt Bailey the 

FRAUD,” an SBLC Program investor recommended that investors copied on the 

email report Jones to the Florida Bar Association for “assisting this fraud.”  

101. Jones did not respond to the investors who emailed him alleging 

fraud. Instead, Jones forwarded their complaints to Bailey. On one or more 

occasions, Bailey told Jones, in sum and substance, that Bailey intended to make 

the complaining investors whole. Despite having access to information about 

Bailey and Borg Bank’s finances and investors, Jones took no steps to confirm 

Bailey’s statements, to confirm whether Borg Bank repaid the investors, or to 

directly address complaints with individuals who contacted him.  

102. Jones continued to accept investor money on behalf of Borg Bank 

through October 2022 (and was willing to do so through December 2022), and to 

direct the money at Bailey’s direction in furtherance of the above-described 

fraudulent scheme.  

103. In mid-2020, after receiving investor complaints, Jones raised his fees 

from .5% to .65%, or a minimum of $250, per investor deposit, citing to Bailey 

that he had learned Bailey may be under a federal criminal investigation.  

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104. In 2022, Jones again raised his “paymaster” fees to 1%, or a minimum 

of $1,000, per investor deposit, citing the increased workload due to investor 

complaints.  

105. On or about April 16, 2022, Jones informed Bailey by text message 

that he was increasing his fees due to the “repeated threats of bar complaints, 

lawsuits, [and] criminal investigations. . . .” Jones further wrote, “Remember, when 

the FBI came to interview me regarding the one incident, they recognized your 

name and expressed concern about my working with you, which tells me that those 

threats have not been mere lip service despite my own efforts to reassure each 

complaining investor. . . .”  

106. In July 2022, a large U.S. financial institution closed the IOLTA 

account of Jones’s law firm after an investor reported to that bank that Borg Bank’s 

investment schemes were a fraud. 

107. However, in June 2022, shortly before the account was closed, Jones 

opened a new account at a different U.S. financial institution and continued to 

receive and disburse funds on Bailey’s behalf through October 2022.  

108. On December 15, 2022, Jones terminated his relationship with Bailey 

and Borg Bank “due to the recent frequency of concerns expressed by your 

associates about your performance of agreements involving funds transferred to 

you using my services.”  

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109. Between November 2019, when Jones first received an investor 

complaint about Bailey, and the time Jones terminated his relationship with Bailey 

in December 2022, approximately $1.4 million in Borg Bank-related investor funds 

passed through the IOLTA account of Jones’s law firm, and Jones took 

approximately $14,000 in fees. 

110. In the face of the numerous “red flags” and suspicious events that 

should have alerted him to Bailey and Borg Bank’s improper conduct, Jones 

knowingly or recklessly provided substantial assistance to Bailey and Borg Bank’s 

fraudulent conduct by allowing investor money to flow through his law firm’s 

IOLTA account, disbursing the money at Bailey’s direction, and lending the 

imprimatur of his law firm to Bailey and Borg Bank’s unlawful enterprise.   

VII. BORG GLOBAL RECEIVED PROCEEDS FROM BAILEY AND 
BORG BANK’S FRAUD TO WHICH IT HAS NO LEGITIMATE 
CLAIM. 

111. During the Relevant Period, Borg Global received at least $163,000 

from Borg Bank’s investors. 

112. This money constituted the proceeds of, or was traceable to the 

proceeds of, Bailey and Borg Bank’s violations of the securities laws. 

113. Borg Global has no legitimate claim to the investor money. 

 

 

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114. Borg Global did not provide any reciprocal services that would entitle 

it to payment from investor funds. 

115. The funds should be returned to defrauded investors. 

CLAIMS FOR RELIEF 

FIRST CLAIM FOR RELIEF 
Section 10(b) and Rule 10b-5 of the Exchange Act 

(Bailey and Borg Bank) 
 

116. The SEC realleges and incorporates by reference in this claim for 

relief the allegations set forth above.  

117. Bailey and Borg Bank, directly or indirectly, in connection with the 

purchase or sale of a security, and by the use of means or instrumentalities of 

interstate commerce, of the mails, or of the facilities of a national securities 

exchange, knowingly or severely recklessly: (a) employed devices, schemes, or 

artifices to defraud; (b) made untrue statements of a material fact or omitted to 

state a material fact necessary in order to make the statements made, in the light of 

the circumstances under which they were made, not misleading; and (c) engaged in 

acts, practices, or courses of business which operated or would operate as a fraud 

or deceit upon other persons. 

118. By engaging in the conduct described above, Bailey and Borg Bank 

violated, and unless restrained and enjoined will continue to violate, Section 10(b) 

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of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 

240.10b-5]. 

SECOND CLAIM FOR RELIEF 
Section 17(a) of the Securities Act 

(Bailey and Borg Bank) 
 

119. The SEC realleges and incorporates by reference in this claim for 

relief the allegations set forth above.  

120. Bailey and Borg Bank, directly or indirectly, in the offer or sale of 

securities by the use of means or instruments of transportation or communication 

in interstate commerce or by use of the mails, acting with the requisite state of 

mind: (a) employed devices, schemes, or artifices to defraud; (b) obtained money 

or property by means of one or more untrue statements of a material fact or by 

omitting to state a material fact necessary in order to make the statements made, in 

light of the circumstances under which they were made, not misleading; and (c) 

engaged in transactions, practices, or courses of business which operated or would 

operate as a fraud or deceit upon the purchaser. 

121. By virtue of the foregoing, Bailey and Borg Bank, directly or 

indirectly, violated and, unless restrained and enjoined, will again violate Section 

17(a) of the Securities Act [15 U.S.C. § 77q(a)]. 

 

 

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THIRD CLAIM FOR RELIEF 
Aiding and Abetting Violations of the Exchange Act  

Section 10(b) and Rule 10b-5 Thereunder and Securities Act Section 17(a) 
(Jones) 

 
122. The SEC realleges and incorporates by reference in this claim for 

relief the allegations set forth above.  

123. Bailey and Borg Bank violated Section 10(b) of the Exchange Act [15 

U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5] and Section 

17(a) of the Securities Act [15 U.S.C. § 77q(a)]. 

124. As a result of the conduct alleged herein, between November 2019 

and December 2022, Jones aided and abetted Bailey and Borg Bank’s violations of 

the Exchange Act and the Securities Act by knowingly or recklessly providing 

substantial assistance to Bailey and Borg Bank in furtherance of those violations. 

125. By virtue of the foregoing, Jones, directly or indirectly, aided and 

abetted and, unless enjoined, will again aid and abet violations of Section 10(b) of 

the Exchange Act [15 U.S.C. § 78j(b)], Rule 10b-5 thereunder [17 C.F.R. § 

240.10b-5], and Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)]. 

FOURTH CLAIM FOR RELIEF 
Disgorgement from Relief Defendant – Pursuant to Sections 21(d)(3), (5) and 

(7) of the Exchange Act and Equitable Principles 
(Relief Defendant Borg Global) 

 
126. The SEC realleges and incorporates by reference in this claim for 

relief the allegations set forth above. 

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127. Borg Global obtained money, property, and assets that are the 

proceeds, or are traceable to the proceeds, of the fraud and violations of the 

securities laws by Bailey and Borg Bank. 

128. Borg Global has no legitimate claim to these illicit proceeds or assets, 

having obtained the funds under circumstances in which it is not just, equitable, or 

conscionable for it to retain the funds or assets, and therefore it has been unjustly 

enriched. Borg Global should be required to disgorge all such ill-gotten gains.  [15 

U.S.C. §§ 78u(d)(3), (5), and (7) and equitable principles].  

PRAYER FOR RELIEF 
 

WHEREFORE, the SEC seeks the following relief: 
 
1. Find that the Defendants committed the violations alleged in this 

Complaint;  

2. Enter an injunction, in a form consistent with Rule 65 of the Federal 

Rules of Civil Procedure, permanently restraining and enjoining Defendants and 

their agents, servants, employees, attorneys, and accountants, and those persons in 

active concert or participation with them, who receive actual notice of the Final 

Judgment by personal service or otherwise, and each of them, from engaging in 

transactions, acts, practices, and courses of business described herein, and from 

engaging in conduct of similar purport and object in violation of Section 17(a) of 

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Securities Act [15 U.S.C. § 77q(a)] and Section 10(b) of the Exchange Act [15 

U.S.C. § 78j(b)] and Exchange Act Rule 10b-5 [17 C.F.R. § 240.10b-5] thereunder; 

3. Enter an injunction, in a form consistent with Rule 65(d) of the 

Federal Rules of Civil Procedure, permanently restraining and enjoining Bailey 

from directly or indirectly, including, but not limited to, through any entity owned 

or controlled by him, participating in the issuance, purchase, offer, or sale of any 

security, provided, however, that such injunction shall not prevent Bailey from 

purchasing or selling securities for his own personal account; 

4. Enter an injunction, in a form consistent with Rule 65(d) of the 

Federal Rules of Civil Procedure, permanently restraining and enjoining Jones 

from directly or indirectly, including, but not limited to, through any entity owned 

or controlled by him, participating in, including acting as a “paymaster” in 

connection with, the issuance, purchase, offer, or sale of any security, provided, 

however, that such injunction shall not prevent Jones from purchasing or selling 

securities for his own personal account; 

5. Order Defendants and Relief Defendant to disgorge all ill-gotten gains 

received during the period of the violative conduct, plus prejudgment interest 

thereon, pursuant to the Court’s equitable powers and Sections 21(d)(3), 21(d)(5), 

and 21(d)(7) of the Exchange Act [15 U.S.C. §§ 78u(d)(3), 78u(d)(5), and 

78u(d)(7)]; 

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6. Order Defendants to pay civil money penalties pursuant to Section 

20(d) of the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the 

Exchange Act [15 U.S.C. § 78u(d)(3)];  

7. Enter an order pursuant to Section 20(e) of the Securities Act [15 

U.S.C. § 77t(e)] and Section 21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)] 

prohibiting Bailey from acting as an officer or director of any issuer that has a class 

of securities registered pursuant to Section 12 of the Exchange Act (15 U.S.C. § 

78l), or that is required to file reports pursuant to Section 15(d) of the Exchange 

Act (15 U.S.C. § 78o(d)); and  

8. Grant such other and further relief as the Court may deem just and 

proper.  

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JURY DEMAND 
 

The SEC demands a trial by jury on all claims so triable. 
 
 

Dated:  July 25, 2024  Respectfully submitted, 
   

 
 By: /s/ James P. McDonald 
  James P. McDonald (NY Bar No. 4823910)  

Jacqueline Moessner (NY Bar No. 4456521) 
Rachel E. Yeates (CO Bar No. 45759) 
U.S. Securities and Exchange Commission 
1961 Stout Street, Suite 1700 
Denver, CO 80294-1961 
Telephone: (303) 844-1000 
Email:     [email protected]  
                [email protected] 
         [email protected] 
 
Attorneys for Plaintiff  
U.S. Securities and Exchange Commission 

   
 

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