George Louis Theodule of Wellington, Florida was arrested Friday for organizing a Ponzi scheme that duped investors out of nearly $60 million, a press release from the United States Attorney for the Southern District of Florida indicates. Theodule, 52, was booked into police custody on 36 counts of wire fraud, three counts of money laundering, and one count of securities fraud. It was unclear whether he qualified for bail bond. The press did not say whether Theodule had obtained a defense attorney.
Little is known about Theodule’s background. He allegedly told investors that he had 17 years of experience working as a successful stock trader. According to sources, however, Theodule did not make a good living as an investor and did not have any reported income between 2000 and 2007. Several years ago, the U.S. Securities and Exchange Commission filed a civil lawsuit against Theodule and his businesses in an effort to put a halt to his “ongoing fraud,” reports say. That effort appears to have been successful at stopping the alleged scheme.
The indictment says that the scheme operated from July 2007 and December 2008. According to reports, Theodule owned and operated two investment firms called Creative Capital Consortium and Creative Capital Concepts. Theodule created and organized the creation of “investment clubs” in the South Florida area and various other places throughout the U.S. The scheme primarily targeted the Haitian community, the indictment alleges. Theodule and his conspirators reportedly offered investors the opportunity to double their money in three months through the clubs.
Theodule convinced clients their investment money would be doubled, when, “In reality, the defendant was conducting a Ponzi scheme,” the indictment says. Based on reports, Theodule and his inner circle had been spending the investors’ money. “Virtually 100 percent of the money, he spent,” a court-appointed receiver reportedly told the press. “He blew it out in every single way possible: lavish car collections, motorcycles, rings, Vegas trips…in every way imaginable.” The report did not mention whether these assets have been seized.
In all, Theodule’s scheme allegedly netted around $60 million from thousands of investors. Reports say prosecutors are working hard to retrieve the allegedly stolen money using compensation lawsuits, but it still not clear whether victims will be getting their money back. “This is a stark reminder that promises of large returns with little risk should immediately send up red flags and make investors run the other way,” a Miami FBI spokesperson reportedly said. “Securities markets must be regulated and transparent so investors can continue to trust and have faith in the system. Proactive investigations allow the FBI to prevent losses to victims by identifying those involved and holding them accountable for their unscrupulous actions.”
“This case provides an egregious example of someone exploiting the trust of members of their own community,” an OFR Commissioner said. “The OFR is committed to protecting the citizens of Florida while providing smart, efficient and effective regulation of the financial services industry.” It is was not clear from the press release whether anyone else has been arrested for taking part in the alleged Ponzi scheme.