U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23907 / August 16, 2017
Securities and Exchange Commission v. Robert Cortez Marshall, No. 2:17-CV 2189 (D. Nev. filed Aug. 15, 2017)
SEC Charges Operator of $5.7 Million Ponzi Scheme That Claimed to Fund Investments in Cars with Display Advertisements
The Securities and Exchange Commission today charged a Las Vegas resident with operating a $5.7 million Ponzi scheme that claimed to generate profits from display advertisements on cars.
According to the SEC's complaint, Robert Cortez Marshall raised at least $5.7 million from approximately 200 investors residing in several states in an unregistered offering of the securities of his company, Adz on Wheelz. Marshall allegedly told investors that Adz would buy cars to display advertisements on large computer monitors installed into the car's doors, roof and trunk. The SEC alleges that Marshall and Adz promised investors "guaranteed weekly royalty" payments totaling over 200% a year and told them that they could receive a full refund at any time. However, according to the SEC, the company almost immediately ran into technical issues with the display monitors, and Adz sold few, if any, advertisements. The SEC further alleges that, because Adz derived minimal revenue, Marshall made royalty payments to existing investors with new investors' money, thereby operating a Ponzi scheme. The SEC also alleges that Marshall stole $1.63 million of investor funds, which he used to make cash payments to himself and for merchandise, meals and entertainment expenses.
Investors can quickly and easily check the credentials of people selling investments and determine whether they are registered by using the SEC's investor.gov website.
The SEC's complaint, filed in federal court in Nevada, charges Marshall with violating Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. The SEC seeks permanent injunctions, disgorgement of ill-gotten gains plus interest, and civil penalties.
The SEC's investigation was conducted by David Rosen and Chris Conte, and supervised by Marc Blau. The SEC's litigation will be led by David Van Havermaat.