U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23291 / June 23, 2015
Securities and Exchange Commission v. Phil Donnahue Williamson, Civil Action No. 1:15-cv-22080-CMA (S.D. Fla. Filed June 1, 2015)
Court Enters Final Judgment Against South Florida Investment Adviser
The Securities and Exchange Commission announced that on June 1, 2015 it filed a civil action charging Phil Donnahue Williamson with siphoning money from his investment fund and defrauding investors, including several retired local teachers and law enforcement officers in violation of the anti-fraud provisions of the Investment Advisers Act of 1940 ("Advisers Act").
The SEC alleged that Phil Donnahue Williamson conducted a Ponzi scheme with money he raised for the Sterling Investment Fund, which purportedly invested in mortgages and properties in Florida and Georgia. Many of Williamson's investors were public sector retirees such as teachers and law enforcement officers who sought safe investments for their retirement savings. Williamson assured investors there was no risk involved and they would receive annual returns of 8 to 12 percent. But rather than invest their money as promised, he used the majority of fund assets to pay his personal expenses and make supposed returns to investors. Williamson created fictitious valuations that were sent to investors.
According to the SEC's complaint filed in U.S. District Court for the Southern District of Florida, one retired Miami-Dade County school teacher and church pastor invested $125,000 in the fund. That same day, Williamson transferred himself $10,000 to pay his credit card bill and make a car payment to BMW among other personal expenditures. Williamson later paid $24,400 to other investors in the fund as purported distributions, and transferred himself another $24,000 to pay additional personal expenses.
In a parallel action, the U.S. Attorney's Office for the Southern District of Florida announced criminal charges against Williamson.
Williamson agreed to settle the SEC's charges. On June 2, 2015, the court entered a final judgment against Williamson permanently restraining and enjoining Williamson from violating Sections 206(1), (2), and (4) of the Advisers Act and Rule 206(4)-8 thereunder, and further ordered that Williamson is liable for disgorgement of $748,050.
The SEC's investigation was conducted by Casey Cohen and Margaret Vizzi in the Miami office, and the case was supervised by Assistant Regional Director Jason R. Berkowitz and Associate Regional Director Glenn S. Gordon. The litigation will be handled by Andrew O. Schiff. The SEC appreciates the assistance of the U.S. Attorney's Office for the Southern District of Florida, the Federal Bureau of Investigation, and the Florida Office of Financial Regulation.