SEC Halts $800 Million Investment Fraud By Financial Advisory Consultants in Orange County

Charges have been filed against Financial Advisory Consultants (FAC) to halt a fraudulent scheme in which over 5,200 investor accounts purportedly hold $813 million. A temporary injunction has been granted.

The SEC describes the scheme as having the "classic indicia of a Ponzi scheme." FAC's promoter, James P. Lewis, sold investments in two funds, known as the Income Fund, Ltd. and the Growth Fund, Ltd. since 1983. The funds purportedly have had solid performance returns by purportedly investing in equipment leasing and insurance premium financing programs.

Since June, 2003, Lewis has refused to honor requests by many investors to withdraw money, citing an asset freeze by the Department of Homeland Security (untrue) and despite his own withdrawals of $3 million from one of the funds.

Source: Wall Street Journal, December 23, 2003