Press Release: SEC Charges Edward May and E-M Management for Massive Offering Fraud Harming Seniors and Other Investors
summary
Edward May and E-M Management Co. LLC defrauded approximately 1,200 investors, many seniors, by falsely claiming lucrative telecommunications contracts with Las Vegas casinos and hotels, raising $250 million through fake LLCs and forged documents, leading to SEC charges seeking injunctions, disgorgement, and penalties.
paragraph
The SEC charged Edward May and E-M Management Co. LLC with orchestrating a $250 million securities fraud between 1998 and July 2007, selling investors interests in LLCs that purportedly held contracts with major hotel chains and casinos like MGM Grand and Hilton—contracts that never existed. The defendants used fabricated agreements, fictitious executive names, and investment seminars to deceive investors across multiple states, promising guaranteed monthly returns for up to 14 years. They violated Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Section 10(b) and Rule 10b-5 of the Securities Exchange Act, prompting the SEC to seek permanent injunctions, disgorgement of ill-gotten gains, prejudgment interest, and civil penalties.
narrative
Edward May and E-M Management Co. LLC orchestrated a $250 million securities fraud between 1998 and July 2007, targeting approximately 1,200 investors, many of whom were senior citizens, by selling interests in limited liability companies falsely claimed to have telecommunications contracts with major Las Vegas casinos and hotel chains including Hilton, MGM Grand, and Sheraton. In reality, no such contracts existed; the defendants created and distributed forged documents containing the names of fictitious hotel executives to lend credibility to their scheme. They recruited victims through investment seminars and promised guaranteed monthly returns for 12 to 14 years, assuring investors their payments would be secure for at least the first 20 to 24 months. The fraud spanned multiple states, including Michigan, California, Florida, Illinois, New York, Ohio, and New Jersey. The SEC alleged violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Section 10(b) and Rule 10b-5 of the Securities Exchange Act, and sought permanent injunctions, disgorgement of all ill-gotten gains, prejudgment interest, and civil penalties. This case was part of the SEC’s broader 2007 enforcement push against fraud targeting retirees, with Director Linda Chatman Thomsen emphasizing the Commission’s commitment to aggressively prosecute predators of vulnerable populations. Investigations into the broader network of individuals involved in organizing the seminars and facilitating the fraud remained ongoing at the time of the filing.
Classified affinity-fraud(confidence 80%). EDGAR detection: forms Form D· recall 58% / precision 2%. detection rule →
Statutes
Parties
detroit-area resident edward may and e-m management co. llcinvestment seminarslinda chatman thomsenmerri jo gilletteSecurities and Exchange Commissionsome fictitious contractssome individualsthe sec complaint
Keywords
e-minvestorsoffering fraudchicago regionalsecsecuritiescontractsmanagement massivemassive offeringfraud harmingharming seniorsseniors investorsofferingregionaledward
Extracted insights
Dollar amounts 1
- $250.00M $250 million $100M–$1B
Entities 8
- company detroit-area resident edward may and e-m management co. llc
- person investment seminars
- person linda chatman thomsen
- person merri jo gillette
- agency Securities and Exchange Commission
- person some fictitious contracts
- person some individuals
- agency the sec complaint
Triples 22
- Sec Charges Edward May and E-M Management
- The SEC Filed Charges Stemming from a $250 million offering fraud
- The SEC Charged Detroit-area resident Edward May and E-M Management Co. LLC
- May and E-M Sold Shares of limited liability companies
- May and E-M Claimed Had received revenues from telecommunications equipment and services contracts with hotels, casinos, resorts and similar establishments
- May and E-M Rely on A network of individuals
- Some individuals Organized Investment seminars
- The SEC Brought 46 enforcement actions in Fiscal 2007 against frauds targeting retirees and other older investors
- Linda Chatman Thomsen Said This action reaffirms the Commission's commitment to take aggressive and forceful action against those who cause widespread harm through fraudulent securities offerings, particularly those who prey upon the elderly
- Merri Jo Gillette Added Our investigation has uncovered a brazen scam in which the defendants touted phony casino and resort deals, complete with bogus contracts and fictitious hotel executives, to cheat hundreds of investors out of millions of dollars
- The Commission Filed A civil injunctive complaint in the U.S. District Court, Eastern District of Michigan
- May Raised As much as $250 million between 1998 and July 2007 from investors living in such states as Michigan, California, Florida, Illinois, New York, Ohio and New Jersey
- May and E-M Sold Securities in the form of interests in limited liability companies (LLCs)
- May and E-M Told Investors that these LLCs had been contracted to install and provide telecommunications equipment and services to such major hotel chains and casinos as Hilton, MGM Grand, Motel 6, Tropicana and Sheraton
- May and E-M Promised Returns in the form of monthly payments to investors for a period as long as 12 to 14 years
- May and E-M Guaranteed That investors, at a minimum, would receive the promised payments for approximately the first 20 to 24 months after they invested
- The complaint Alleges That, in reality, the LLCs did not have any telecommunication contracts with the establishments identified in offering materials provided by May and E-M
- May and E-M Provided Copies of fictitious contracts between E-M or certain LLCs and various hotels and casinos
- Some fictitious contracts Included The names of purported hotel executives who did not exist
- The SEC complaint Alleges That, as a result of their misconduct, May and E-M violated, and unless enjoined will continue to violate, Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act and Rule 10b-5 thereunder
- The Commission Seeks Orders of preliminary and permanent injunction against May and E-M enjoining them from future violations of certain federal securities laws
- The Commission Requires May and E-M to pay disgorgement of ill-gotten gains, prejudgment interest and civil penalties
Extracted body text (4,212c)
SEC Charges Edward May and E-M Management for Massive Offering Fraud Harming Seniors and Other Investors FOR IMMEDIATE RELEASE 2007-240 Washington, D.C., Nov. 20, 2007 - The Securities and Exchange Commission today filed charges stemming from a $250 million offering fraud that involved phony Las Vegas casino and resort telecommunications deals and victimized as many as 1,200 investors, many of whom were senior citizens. The SEC's action charges Detroit-area resident Edward May and E-M Management Co. LLC with selling investors shares of limited liability companies that they claimed had received revenues from telecommunications equipment and services contracts with hotels, casinos, resorts and similar establishments, many of which were purportedly located in Las Vegas. In fact, no such contracts ever existed. To perpetrate their fraudulent scheme, May and E-M relied on a network of individuals, some of whom organized "investment seminars" to entice investors to invest with E-M. The SEC brought 46 enforcement actions in Fiscal 2007 against frauds targeting retirees and other older investors. Linda Chatman Thomsen, Director of the Commission's Division of Enforcement, said, "This action reaffirms the Commission's commitment to take aggressive and forceful action against those who cause widespread harm through fraudulent securities offerings, particularly those who prey upon the elderly." Merri Jo Gillette, Director of the Commission's Chicago Regional Office, added, "Our investigation has uncovered a brazen scam in which the defendants touted phony casino and resort deals, complete with bogus contracts and fictitious hotel executives, to cheat hundreds of investors out of millions of dollars. The investigation in this matter will continue." The Commission's civil injunctive complaint, filed in the U.S. District Court, Eastern District of Michigan, alleges that May, through E-M, raised as much as $250 million between 1998 and July 2007 from investors living in such states as Michigan, California, Florida, Illinois, New York, Ohio and New Jersey. According to the complaint, May and E-M sold securities in the form of interests in limited liability companies (LLCs), and told investors that these LLCs had been contracted to install and provide telecommunications equipment and services to such major hotel chains and casinos as Hilton, MGM Grand, Motel 6, Tropicana and Sheraton. Both orally and in writing, May and E-M promised returns in the form of monthly payments to investors for a period as long as 12 to 14 years, and "guaranteed" that investors, at a minimum, would receive the promised payments for approximately the first 20 to 24 months after they invested. The complaint alleges that, in reality, the LLCs did not have any telecommunication contracts with the establishments identified in offering materials provided by May and E-M. To further their scheme, May and E-M provided some investors with copies of fictitious contracts between E-M or certain LLCs and various hotels and casinos. Some of these fictitious contracts included the names of purported hotel executives who did not exist. The SEC complaint alleges that, as a result of their misconduct, May and E-M violated, and unless enjoined will continue to violate, Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act and Rule 10b-5 thereunder. As part of this action, the Commission seeks orders of preliminary and permanent injunction against May and E-M enjoining them from future violations of certain federal securities laws and, in addition, requiring May and E-M to pay disgorgement of ill-gotten gains, prejudgment interest and civil penalties. Investors with questions or information about this matter may call the Chicago Regional Office's telephone line dedicated to this case at (312) 353-0626. # # # For more information, contact: Peter K.M. Chan Assistant Regional Director SEC's Chicago Regional Office (312) 353-7410 C.J. Kerstetter Branch Chief SEC's Chicago Regional Office (312) 353-7435 Additional materials: Litigation Release No. LR-20366 http://www.sec.gov/news/press/2007/2007-240.htm Home | Previous Page Modified: 11/20/2007
OCR text (4,212c · plain-text · 99% conf)
SEC Charges Edward May and E-M Management for Massive Offering Fraud Harming Seniors and Other Investors FOR IMMEDIATE RELEASE 2007-240 Washington, D.C., Nov. 20, 2007 - The Securities and Exchange Commission today filed charges stemming from a $250 million offering fraud that involved phony Las Vegas casino and resort telecommunications deals and victimized as many as 1,200 investors, many of whom were senior citizens. The SEC's action charges Detroit-area resident Edward May and E-M Management Co. LLC with selling investors shares of limited liability companies that they claimed had received revenues from telecommunications equipment and services contracts with hotels, casinos, resorts and similar establishments, many of which were purportedly located in Las Vegas. In fact, no such contracts ever existed. To perpetrate their fraudulent scheme, May and E-M relied on a network of individuals, some of whom organized "investment seminars" to entice investors to invest with E-M. The SEC brought 46 enforcement actions in Fiscal 2007 against frauds targeting retirees and other older investors. Linda Chatman Thomsen, Director of the Commission's Division of Enforcement, said, "This action reaffirms the Commission's commitment to take aggressive and forceful action against those who cause widespread harm through fraudulent securities offerings, particularly those who prey upon the elderly." Merri Jo Gillette, Director of the Commission's Chicago Regional Office, added, "Our investigation has uncovered a brazen scam in which the defendants touted phony casino and resort deals, complete with bogus contracts and fictitious hotel executives, to cheat hundreds of investors out of millions of dollars. The investigation in this matter will continue." The Commission's civil injunctive complaint, filed in the U.S. District Court, Eastern District of Michigan, alleges that May, through E-M, raised as much as $250 million between 1998 and July 2007 from investors living in such states as Michigan, California, Florida, Illinois, New York, Ohio and New Jersey. According to the complaint, May and E-M sold securities in the form of interests in limited liability companies (LLCs), and told investors that these LLCs had been contracted to install and provide telecommunications equipment and services to such major hotel chains and casinos as Hilton, MGM Grand, Motel 6, Tropicana and Sheraton. Both orally and in writing, May and E-M promised returns in the form of monthly payments to investors for a period as long as 12 to 14 years, and "guaranteed" that investors, at a minimum, would receive the promised payments for approximately the first 20 to 24 months after they invested. The complaint alleges that, in reality, the LLCs did not have any telecommunication contracts with the establishments identified in offering materials provided by May and E-M. To further their scheme, May and E-M provided some investors with copies of fictitious contracts between E-M or certain LLCs and various hotels and casinos. Some of these fictitious contracts included the names of purported hotel executives who did not exist. The SEC complaint alleges that, as a result of their misconduct, May and E-M violated, and unless enjoined will continue to violate, Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act and Rule 10b-5 thereunder. As part of this action, the Commission seeks orders of preliminary and permanent injunction against May and E-M enjoining them from future violations of certain federal securities laws and, in addition, requiring May and E-M to pay disgorgement of ill-gotten gains, prejudgment interest and civil penalties. Investors with questions or information about this matter may call the Chicago Regional Office's telephone line dedicated to this case at (312) 353-0626. # # # For more information, contact: Peter K.M. Chan Assistant Regional Director SEC's Chicago Regional Office (312) 353-7410 C.J. Kerstetter Branch Chief SEC's Chicago Regional Office (312) 353-7435 Additional materials: Litigation Release No. LR-20366 http://www.sec.gov/news/press/2007/2007-240.htm Home | Previous Page Modified: 11/20/2007