A California Ponzi scheme that defrauded church parishioners is sued by the SEC

One more company that was running a Ponzi scheme is being sued by the Securities and Exchange Commission in Northern California. On Wednesday the SEC filed a complained in federal court against the investment company Equity Investment Management and Trading to freeze its assets in an attempt to save investors’ money.

The SEC complaint reported that Anthony Vassallo, the company president, began attracting clients in 2004 by claiming that he had computer software that allowed to him to buy and sell stocks with the profits of 3.5% and little risks. Many of his investors were the members of his church.

According to the regulator’s allegations a Folsom, Sacramento-based Equity Investment Management and Trading raised over $40 million from about 150 investors. Still there is no distinct information on where the investors’ money went as reported by Michael Dicke, the associate director of the SEC's San Francisco regional office. Meantime, the SEC had located one bank account containing $1.2 million that was under the control of the Folsom company's president, Anthony Vassallo.

"We do believe that they lost some of the money through securities trading," Dicke said in an interview. "We believe they (also) put it into other schemes -- a strip mall and a Utah mining company -- and various other scams where they lost investors' money."

Dicke says that by the moment the agency haven’t obtained any evidence proving that Vassallo and the firm's vice president, Kenneth Kenitzer, had inappropriately spent investors' money on themselves. In case this is confirmed "we will be looking to get all the money back," he said.

No criminal charges were filed against the two. The SEC complaints asks to freeze the assets and to order Vassallo and Kenitzer to account for all investor money, "disgorge their ill-gotten gains" with interest, pay civil penalties and be barred from future violations of federal securities law.