SEC Charges Three Texas Residents in $91 Million Ponzi Scheme
From the desk of Jim Eccleston at Eccleston Law
The Securities and Exchange Commission (“SEC”) has filed charges against Kenneth W. Alexander II, Robert D. Welsh, and Caedrynn E. Conner, all Dallas-Fort Worth residents, for orchestrating a Ponzi scheme that raised at least $91 million from over 200 investors.
According to a SEC.gov press release, Alexander and Welsh ran the scheme from May 2021 through February 2024 through a trust controlled by Alexander called Vanguard Holdings Group Irrevocable Trust (“VHG”). They allegedly promised investors guaranteed monthly returns of 3 percent to 6 percent for 12 months, with the principal to be returned after 14 months. The pair falsely marketed VHG as a highly profitable international bond trading operation managing billions in assets.
The SEC claims Conner played a pivotal role by steering more than $46 million in investor funds to VHG through a related program he operated under Benchmark Capital Holdings Irrevocable Trust, which he controlled. Together, the defendants also marketed a supposed risk-protection tool called a “pay order,” offering investors false assurances that their principal would be safeguarded against losses.
In reality, the SEC alleges, VHG had no legitimate revenue, the monthly returns were funded with new investor money, and the “pay orders” provided no actual protection. The complaint details how Alexander and Conner misappropriated millions for personal luxuries, including Conner’s $5 million home.
The SEC’s complaint charges all three men with violating federal securities antifraud and registration provisions. The SEC seeks permanent injunctive relief, disgorgement of ill-gotten gains with prejudgment interest, and civil penalties against each defendant.
Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.
Tags: eccleston, eccleston law, sec
