Three Charged In $29M MetroWest Ponzi Scheme
Secretary of the Commonwealth William F. Galvin has charged two Newton men with selling more than $4 million in promissory notes issued by a Framingham broker.
Monday, U.S. Attorney for Massachusetts Carmen M. Ortiz charged the broker, Richard Elkinson of Framingham, with mail fraud in operating a Ponzi scheme with the promissory notes.
Galvin alleges in a civil complaint that neither Jay Lawrence Fialkow of Newton, nor Jeffrey P. Ross of Chestnut Hill, was registered to sell securities in Massachusetts.
Galvin also alleges that the firm operated by the two men, RossFialkow Capital Partners LLP of Newton, was not registered to sell securities.
The scheme was brought to Galvin's office's attention by a resident last month.
Elkinson allegedly started to default on paying on outstanding promissory notes in April or May of 2009. The U.S. Attorney's complaint calculates Elkinson's current promissory note obligation to be about $29 million.
The calculation is based on information from 130 investors.
Galvin's complaint seeks an immediate cease and desist order, a permanent cease and desist order, a disgorging of profits from the alleged scheme and an accounting of proceeds from the alleged wrongdoing.
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