CHARLOTTE, NC — The U.S. Securities and Exchange Commission on Thursday charged a North Carolina management consultant with violating anti-fraud regulations by operating a $7 million Ponzi scheme, according to a news release.
The federal government alleges that at least 75 North Carolina residents were conned by Wynn Charlebois of Charlotte.
The money, obtained through fraudulent investors, was used to pay off his family’s debts, mortgage payments, vacations and private schools for his children, the SEC alleges in the complaint.
Charlebois’ “luxurious lifestyle [was] relies almost entirely on attracting new investor money to stay afloat,” the complaint reads.
He has marketed himself as a “self-made” investor and advisor since the early 2000s, the SEC said. He used his social capital and network of associates at an investment bank where he previously worked to attract clients.
Charlebois defrauded investors back in 2005, the SEC claims. He managed to gain people’s trust and persuaded investors to enter into loan deals, ostensibly using the funds to buy shares in private companies, among other things.
The SEC said he also lied to investors, telling them he worked for companies he didn’t, and offering his services as a consultant.
In recent years, Charlebois has “offered investors the opportunity to participate in investments where gains would be realized through the exercise of stock options he claims to hold.”
An SEC review of Charlebois’ accounts found that he was constantly circulating money between commercial and private banks to maintain average daily balances and appear to be delivering on his promises. According to the SEC’s complaint, he often asked investors for cash advances to pay off previous lenders.
If investors asked Charlebois where their money was, he would blame the bank for delays or tell them he was busy, the SEC said. He also forged bank documents to make it appear that investors had money in their bank accounts.
According to the SEC filing, he used the money he received from investors to pay more than $121,000 for his child’s private university in Dallas and another $65,000 for his child’s private high school.
He also used the funds to pay for “lavish” family vacations and stays at the Ritz Carlton. The family spent nearly $9,000 during a week-long vacation in Boca Grande, Fla., even though Charlebois’ checking account was in the red, the filing says.
“The funds Charlebois received from investors were not invested as he announced and he had no source of income other than money received from new investors, loans from personal friends and cash advances from traders,” it said in the complaint.
The SEC is trying to freeze Charlebois’ assets ahead of his day in court.