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.