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SEC Halts Unregistered Offering

The Securities and Exchange Commission (SEC) has charged Navigators International Management Co., Ltd. (Navigators), James R. Spurger and Benjamin W. Young, Jr. with securities fraud, conducting unregistered securities offerings, and acting as unregistered broker-dealers.  Navigators is a Bahamian company run by Spurger and Young.  Spurger lives in the Houston area, while Young is a U.S. citizen [...]

The Securities and Exchange Commission (SEC) has charged Navigators International Management Co., Ltd. (Navigators), James R. Spurger and Benjamin W. Young, Jr. with securities fraud, conducting unregistered securities offerings, and acting as unregistered broker-dealers.  Navigators is a Bahamian company run by Spurger and Young.  Spurger lives in the Houston area, while Young is a U.S. citizen living in El Salvador.

According to the SEC, the defendants raised over $1 million by telling investors that their money would be pooled and used to purchase a bond with which the defendants would secure a line of credit which would provide the promised return.  The defendants told investors that their investment was collateralized and perfectly safe.The defendants did purchase a bond, but it turned out to be a counterfeit.  Undeterred by that experience, the defendants offered stock in an unaffiliated, unregistered company through the Internet by misrepresenting the company’s current and future business contracts.

When the SEC arrived on the scene, the defendants were engaged in yet another offering, this one involving what the defendants called ZCASH electronic tokens.  The defendants promised investors an enormous return on their investment in the ZCASH tokens and rebates on customers’ use of ZCASH tokens when purchasing items on Navigators’ website.

This case marks a trend and underscores how important it is that baby boomers and seniors independently investigate brokers and unregistered investments.  Notice that the defendants’ first effort involved buying a bond from people who turned out to be scam artists themselves.  The bond was counterfeit.

More often we are seeing scams that involve investment in an enterprise that plans to make money by investing in another scam.  I am serving as Receiver in a case like that.  The promoter promised enormous returns.  To generate those enormous returns he invested in a Ponzi scheme.  When that scheme went belly up, he invested in a second Ponzi scheme.  When that one failed, he invested in yet another scam.  If the SEC had not stepped in he would still be raising money by promising outrageous returns and looking for the next Ponzi scheme to generate the returns.

When it comes to sizing up unregistered investments, investors need to investigate several layers deep.

 

1,066 Responses to “SEC Halts Unregistered Offering”

  1. alice.1913 says:

    The defendants have now moved to have all of the further documents, letters and responses SEALED…

    IF THEY HAVE DONE NOTHING WRONG AND ARE “WINNING” THIS CASE THEN WHY DON’T THEY LIKE THE INFORMATION OUT THERE??? Hmmm….

    Oh well… Looks like they are going to have a trail after all… pretrial conferences have re-started and Young is not agreeing to the terms…

    @Miami Pete – yup, I don’t understand how the same collateral can be used for all of the Promissory Notes and IBOE’s that are being issued to the work centers and individuals.

    There are literally THOUSANDS of people and groups that have been issued these things and it is all based on the same collateral?

    The money goes to this bank, you have to pay to open the accounts over there and then WAIT on funding. If it does indeed come in it is not available to you for a year unless you take loans against the collateral?

    But wait, there is a way that you can use the money now domestically but they still have not revealed it yet. Unless that is the deal where you take the paperwork to your local bank or an attorney …

    Head spinning. I agree, the hand slap has been given, yet again but pride is going to get the best of them and the Court is going to get tired of the shenanigans… we can only hope…

  2. GreenT says:

    How do we know the original bond was counterfeit or is just part of the story?

  3. Miami Pete says:

    Alice – No need to even ponder this group further. Just look at the Director fo the IBOM “bank”. It is King David somebody or other and he’s got a long list of scams behind him. He tried to unsuccessfully securitize in ground metal assets a while back. This is the explanation for raising money to be given to the poor blokes who are trying to get their promised loans from two years ago. Don’t these geniuses at the Work Centers do any homework? You don’t magically create $500B at a whack out of thin air. Especially from some alleged bank on a rock out in the pacific ocean. Almost comical now.

  4. Francine says:

    This group will persist because they are convinced that what they are proliferating is simply a new business model based upon theories commerce and capitalism. See one of their “work centers’ web sites at:

    http://www.fhss.info/Flow-Chart.html

    It is snake oils sales entrepreneurship, akin to network and multilevel marketing. They will continue to rope in the poor soul who has lost his home or job and is desperate enough to spend his last dollar hoping for for a miracle to solve his financial problems. It is offering hope with no basis in reality, and as such, is a magnificent time waster and heart crusher. Been there. The people at the top of this pyramid are delusional, deceptive and destructive. My advice to anyone reading this message who may be considering getting involved with this group–run, don’t walk to your nearest exit. There are people making money, but I promise it won’t be you.

  5. GreenT says:

    These are all government trained scammers using government inside connections to bankrupt everyone while they capture all the profit. Pretty creative corruptive. Always using someone else’s money!

  6. Miami Pete says:

    Francine. – Link doesn’t seem to work.

  7. envirocare says:

    Does anyone making comments actually know the King or have they been to the “rock in the Pacific”? I know the King and he is ligit and committed to his indiginous tribal people. I cannot comment on Mr Spurger?

  8. GreenT says:

    There was a Barney King…never had the pleasure of meeting.

  9. Silently Jaded says:

    10 years and counting now since I first heard of this scam.

  10. Jaromir says:

    At last, Financial Hope has been scared into submission, but, oh, wait… Now coming up as Crown Financial Ministries!!! Gary Holmes is a piece of work and now is leaving everyone in the dust and moving onto the next scam.

    Meanwhile back on Business Cannons new protocol’s for the same thing they have been doing for 4 years, just with new names and acronyms (they love to confuse with acronyms!).

    What’s next in the saga of Zcash, SMR, Brightstar, Life Enriched, WWFF, IBOM, Cetusmex, Millennium, Incredible Concepts, Financial Hope, ICC Place, Treasure Chest, Change2100, Rudder, Rolafam, Chips Corner, oh ya and what about Sunrise Universe! Updates on all would be greatly apprecaited, but may have to go back 9 or so years.

  11. interested says:

    any updates on the trial case?

  12. semi-believer says:

    My brother is involved with this stuff, and he personally has been working with things to do with the organizations mentioned here, and he has personally seen things go bad, some of the ‘excuses’ mentioned here are things that really happend.

    He personally knows some one from Honduras who has made things work out for him and recieved funding using one or some of the ‘protocols’ .

    Some people actually do work with the protocols and stuff and some have been able to make it work and some have failed, but its just the same thing in any aspect of life, some make it some dont.

    The reason why there are so many people that think its a scam and whine about it and we dont see many people posting saying they recived funding is becaue the poeple that do recieve funding are not spending time looking into scam blogs because it worked for them, and know its not a scam, and the people that feel scammed do.

    I say im a semi-believer because it hasnt worked for my brother like it should, but at least it has worked for one person he knows personally. The only thing is that you can not let this be your only hope, you need to have other stuff to help you support yourself while trying to make things work.

    I hope this works for my brother, and i hope he doesnt get into any kind of trouble.

  13. IW Dog says:

    Case closed. On July 7, 2011 the SEC issued the following press release:

    The Securities and Exchange Commission announced that the Honorable Nancy F. Atlas of the United States District Court for the Southern District of Texas entered a final judgment today against Benjamin R. Young that (i) enjoins him from violating Sections 5 and 17(a) of the Securities Act of 1933 (Securities Act), and Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder, and (ii) finds him liable for payment of $30,000 under Securities Act Section 20(d) and Exchange Act Section 21(d)(3). Young consented to entry of the judgment and did not admit or deny the allegations in the complaint.

    According to the Commission’s complaint, Young and codefendant James R. Spurger, former officers of Navigators International Management Co., Ltd., a Bahamian Corporation, solicited investors to participate in an unregistered and fraudulent bond funding program. The complaint alleged that investors were promised returns of 67% or more and were assured that their principal was safe and collateralized. The complaint further alleged that investors’ funds were not safe and collateralized and that none of the investors received a return of principal or payment of the promised profits.

    Earlier, on March 28, 2011, the Court entered final judgments against Spurger and Navigators International Management Co., Ltd. enjoining them from violating Sections 5 and 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and (ii) finding them liable for payment of $25,000 and $45,000, respectively, under Securities Act Section 20(d) and Exchange Act Section 21(d)(3). Spurger and the corporation consented to entry of the judgments and did not admit or deny the allegations in the complaint.

    That brings the pending case to a close. While the conclusion might seem anticlimactic, there are important lessons to take from this case. The flood of comments about this case led me to include a reference to it in my book, The Vigilant Investor, due out from AMACOM Books (New York) in October and available for pre-order now through Amazon and Barnes & Noble. The book draws lessons from the stories of actual cases of fraud, recklessness, and incompetence, and teaches investors of all types how to protect their assets. It’s the first book to highlight the importance of incorporating findings from the science of human decision-making into a disciplined due diligence approach. I am honored to say that Professor Burton Malkiel (author of the best-selling A Random Walk Down Wall Street) has written an endorsement to appear on the back cover in which he graciously calls me “The perfect investors’ teacher.” You can read more about the book at http://www.thevigilantinvestor.com.

  14. alice.1913 says:

    Well, anti-climatic is right. Just like the previous cases against both men in Texas and Illinois, pay a little money admit to nothing, be chastised and not allowed to operate or violate… but continue to operate.

    Miami Pete, all of the collateral seems to be coming from the same exact documents or source. So you are right, there is no way that all of the people, work centers and projects can all be entitled to 500 million to 2.5 billion based on the same 1.? billion collateral, or IBOE or whatever it is now.

    Back in the late 80’s and early 90’s there were actual products that we “seemed” to be investing in and projects that we were supposed to be partners in. So as far as due diligence for the folks that have been waiting from the start, and believe me I am not holding my breath, they took the money and ran… plain and simple.

    I am interested to see the book when it is published. We have not heard the end of these folks yet. They continue to write, speak and work the bull that they have been proposing the entire time. Anyone not familiar, BEWARE, BEWARE BEWARE! Run as fast as you possibly can!

    Scott

  15. alice.1913 says:

    Oops, hit the wrong key…

    Scott Friestad and others at the SEC’s enforcement division have stated that they are overwhelmed with cases such as this, and I am sure the book that IW Dog has coming out will probably touch on this…

    Just sad that there was not more teeth in this one.

  16. Miami Pete says:

    Scott – most of this started b/c there were some mortgage brokers who are guys looking for the next great source of money to lend out. These are the guys in the “Work Centers”. People who coudn’t get loans from traditional channels went to them and they somehow got hooked up with these professional scamsters. I don’t think they started out wanting to fleece people looking to borrow but they were not sophisticated enough to truly investigate and understand who or what they were dealing with as it relates to the money providers. So the Work Center folks drank the coolaid and continue doing so just as the borrowers who put up money continue to believe these guys will get them funded. However collateral damage has resulted from the inability to deliver real funds in a timely manner. A fascinating education to anyone who has followed this saga.

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