The US Securities and Exchange Commission (SEC) has filed fraud charges and an asset freeze against the operators of a South Florida-based investment fund, one of whom has a prior conviction and is on parole after nearly 20 years in prison.
SEC filed an “emergency action” in federal district court against Castleberry Financial Services, its president Jonathon Turner, formerly known as Jon Barri Brothers, and chief executive Norman Strell, alleging that in the past year they have defrauded investors out of $3.6m (£2.72m, €3.16m).
According to SEC’s complaint, Castleberry falsely represented to investors that it had hundreds of millions of dollars in capital invested in local businesses and a portfolio of hundreds of investment properties.
The filing said Castleberry claimed to “offer high yields while protecting investors’ principal” by having it “fully insured and bonded” by CNA Financial and Chubb Group, but the insurance companies had no relationship with Castleberry and did not authorise it to use their logos in Castleberry’s sales materials.
SEC alleges that Turner and Strell “misused investor funds to pay personal expenses and transferred other funds to businesses they controlled and to family members”.
The complaint also alleges that Castleberry “falsely stated” on its website and in promotional materials that Turner has finance industry experience, an MBA degree, and a law degree, while hiding that Turner has been convicted of multiple fraud, theft, and forgery felonies and was imprisoned from 1998 until 2016.
“We received an investor tip during the partial government shutdown that provided critical evidence. The team then moved quickly to halt the alleged ongoing fraud,” said Eric Bustillo, director of the Miami regional office. “We encourage anyone that suspects potential investment fraud to report it to the SEC.”
The Honorable Judge Robin Rosenberg of the US District Court for the Southern District of Florida granted the SEC’s request for a temporary restraining order and temporary asset freeze against the defendants, and issued an order directing the defendants to provide a sworn account of the details.
SEC’s investigation is still continuing,
