A 67-year-old Miami man used “affinity fraud” to bilk gay
investors in an $11 million Ponzi scheme, the SEC claims in court. The
SEC has now sued George Elia and his company, and sued 212 Entertainment Club
and Elia Realty as relief defendants, alleging “affinity fraud.”

“From
March 2005 to January 2012, defendants George Elia and his company,
International Consultants & Investment Group Ltd. Corp.
(‘International Consultants’), orchestrated a Ponzi scheme in which Elia
raised approximately $11 million from approximately 25 investors,” the
SEC says in its 19-page complaint.
    

“Elia’s scheme was, in part,
an affinity fraud: a number of the investors were members of the gay
community in Wilton Manors, Florida. Elia falsely told investors he had a
long track record of day trading stocks and exchange traded funds to
yield annual returns as high as 26 percent, and that his trading on
behalf of investors was paying quarterly returns of up to 20 percent.
    

“However,
in fact, Elia’s trading resulted in losses or only marginal gains in
limited time periods. Further, he misappropriated millions of dollars of
investor funds, so any percentage returns he claimed could not have
provided enough profits to pay all investors the returns he claimed.
Elia transferred the funds to entities he controlled, including relief
defendants 212 Entertainment Club Inc., and Elia Realty Inc. He also
used some of the funds to pay personal expenses such as mortgage and car
payments, and to pay an associate to introduce him to potential
investors to sustain his Ponzi scheme. …
    

“Elia, age 67, until
recently resided in Oakland Park, Florida, but is believed to now reside
in Cyprus. Elia has never been registered with the Commission in any
capacity.
    

“International Consultants is a Florida corporation
with its principal place of business in Fort Lauderdale. Elia was the
corporation’s president. Subscription documents for investment funds
Vision Equities Funds II and IV described International Consultants as
the funds’ investment adviser or manager. International Consultants has
never been registered with the Commission as an investment adviser.
    

“Elia Realty Inc. is a Florida corporation with its principal place of business in Fort
Lauderdale. Elia is its president and a director. Elia Realty received
transfers of approximately $645,000 from International Consultants and
Vision Equities Funds’ bank and brokerage accounts. The fund transfers
to Elia Realty occurred from the same accounts that received millions of
dollars of investor funds. Elia transferred the funds to Elia Realty in
dozens of separate transfers by check and internal bank transfers in
amounts of several hundred or several thousand dollars, sometimes more
than once a day, indicating that the transfers were not in exchange for
goods or services Elia Realty provided to International Consultants or
the Vision Equities Funds.
    

 “212 Entertainment Club Inc. is a
Florida corporation with its principal place of business in Fort
Lauderdale. Elia is its president. 212 Entertainment Club received
transfers of approximately $1.9 million from International Consultants
and Vision Equities Funds’ bank and brokerage accounts. The fund
transfers to 212 Entertainment Club occurred from the same accounts that
received millions of dollars of investor funds. Elia transferred the
funds to 212 Entertainment Club in dozens of separate transfers by check
and internal bank transfers in amounts of several hundred or several
thousand dollars, sometimes more than once a day, indicating that the
transfers were not in exchange for goods or services 212 Entertainment
Club provided to International Consultants or the Vision Equities
Funds.”

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By David Cary Hart

Retired CEO. Formerly a W.E. Deming-trained quality-management consultant. Now just a cranky Jewish queer. Gay cis. He/Him/His.