UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Securities and Exchange Commission v. John F. Turant, Jr., et al., Civil Action No. 3:CV03-1614 (M.D. Pa.)
SEC SUES JOHN F. TURANT, JR., RUSS R. LUCIANO AND OTHERS FOR RAISING $4.5 MILLION IN OFFERING FRAUD
The Securities and Exchange Commission ("Commission") announced today that it filed a civil action in the United States District Court for the Middle District of Pennsylvania against John F. Turant, Jr., of Wapwallopen, Pennsylvania, Russ R. Luciano, of Duryea, Pennsylvania and four entities operated by them, alleging an offering fraud in which the defendants raised approximately $4.5 million from more than 100 investors.
The Commission's complaint alleges that, from July 1999 until March 2003, Turant and Luciano solicited funds by falsely representing to prospective investors that they would invest their money in one of two purported hedge funds, defendants JTI Group Fund, LP and Evergreen Investment Group, LP, for the purpose of day-trading securities, promising annual returns from 20% to 120%. The complaint alleges that, in fact, only a small portion of the money raised was ever invested, that the funds were never profitable, and that much of the money that was invested was lost. Turant and Luciano then concealed their scheme and lulled investors by providing fictitious monthly account statements and other false documents to investors.
The complaint further alleges that, of the $4.5 million raised, Turant and Luciano used more than $3.8 million for unauthorized purposes, including paying approximately $2.2 million to existing investors, in the nature of a Ponzi scheme. In addition, Turant and Luciano misappropriated almost $1 million for their personal use.
Named as defendants in the Commission's action are Turant, Luciano, JTI Group Fund, LP, Evergreen Investment Group, LP and the general partners of the funds, JTI Investment Group, Inc. and New Resource Investment Group, Inc.
The complaint charges all of the defendants 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; and defendants JTI Group Fund, LP and Evergreen Investment Group, LP with violating Section 7(a) of the Investment Company Act of 1940. The complaint seeks permanent injunctions, disgorgement, prejudgment interest and the imposition of civil penalties.
The Commission brought this action in coordination with the United States Attorney for the Middle District of Pennsylvania, who has filed related criminal charges against Turant and Luciano.