Ponzi Scheme Seduces Investors for $3.8 Million

A Colorado-based pyramid and Ponzi scheme that boasts returns of 700 percent has been charged with fraud by the U. S. Securities and Exchange Commission (“SEC”). Since April 2014, Kristin Johnson and Troy Barnes who operated under “The Achieve Community,” have fraudulently raised almost $4 million from investors.

Through website promotion and videos, the schemers seduced investors by requesting a $50 purchasing fee and promised that they’d receive a $400 payout on each investor they signed up with within three to six months. This scheme, which operates like any other pyramid scheme, pays returns to older investors with fund from new investors.

“Johnson and Barnes allegedly claim to be operating a successful investment program when in fact they are taking funds from new investors to pay phony profits to earlier investors,” said Julie Lutz, Director of the SEC’s Denver Regional Office.

While the SEC is cracking down on identifying and punishing those who run Ponzi schemes there are still those who try to obtain investor funds through such fraudulent activity. It is important for advisors to remember that prior to recommending any investments for clientele that proper due diligence and vetting of such investments are conducted.

The SEC’s complaint alleges that Johnson and Barnes violated Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5.

For more information on this and other related subjects, please contact us at (619) 278-0020 to schedule a consultation.

One Response

  • Thanks for your superb article on Ponzi Schemes. Ponzi scheme is a fraudulent investing scam, it has to promise the investor to get high rates of return with little risk.

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