The Securities and Exchange Commission has charged Vero Beach, Florida couple, Richard and Susan Olive, for allegedly raising millions of dollars selling investments for a purported charitable organization while defrauding senior citizens and exaggerating the amount of contributions actually made to charity.
The SEC complaint, filed in the Southern District of Florida, charges the Olives with aiding and abetting violations of the antifraud provisions of the federal securities laws as well as violations of the securities and broker-dealer registration provisions of the federal securities laws.
The SEC complaint against the Olives lays out a scheme where the Olives were hired at We The People Inc., a Tallahassee-based non-profit organization that obtained $75 million from more than 400 investors in Florida, Colorado, and Texas by selling an investment product they described as a charitable gift annuity (CGA). Allegations are that the CGAs issued by We The People differed from legitimately-issued CGAs– namely that they were issued primarily to benefit the Olives and other third-party promoters and consultants. Only a small amount of the money raised was actually directed to charitable services. Meanwhile the Olives received more than $1.1 million in salary and commissions, and they also siphoned away investor funds for their personal use.
The SEC further alleges that the Olives lured elderly investors with limited investing experience into the scheme by making a number of false representations about the purported value and financial benefits of We The People’s CGAs. The Olives also lied about the safety and security of the investments.
At one point, the SEC claims the group claimed to have donated $21.8 million toward initiatives for orphans with AIDS in Zambia, but We The People in fact made only a small payment to a third party that was shipping supplies to Africa.
Meanwhile, Mr. Olive is currently facing criminal charges of mail fraud, wire fraud and money laundering in federal court in Tennessee. In that case, he allegedly oversaw the National Foundation of America and obtained $20 million in another CGA plan. That case is ongoing.
According to the SEC’s complaint against the Olives filed in U.S. District Court for the Southern District of Florida, investors were coaxed to transfer assets including stocks, annuities, real estate, and cash to We The People in exchange for a CGA. We The People claimed to operate as a non-profit organization while it was offering the CGAs from June 2008 to April 2012. However, We The People was not operating as a charity but instead for the primary purpose of issuing CGAs and using the proceeds to pay substantial sums to the Olives, third-party promoters, and consultants. On rare occasions when We The People did actually direct money raised toward charitable services, it was insignificant.
The SEC also filed separate complaints today against We The People as well as the company’s in-house counsel William G. Reeves. They both agreed to settle the charges without admitting or denying the allegations. The settlements are subject to court approval. The SEC is seeking disgorgement of ill-gotten gains plus pre- and post-judgment interest and financial penalties against the Olives.
Did you know that as a corporate executive, if you do not cooperate with an SEC investigation, you could lose your job? However, by testifying, you could strengthen the government’s case against you–which could result in a criminal indictment. Before participating in any investigation, contact a Florida Securities Fraud Attorney at Whittel & Melton first. While losing your job can be distressing, prison time is far worse. We can help you determine the best solution for your unique situation, and create a strong defense strategy to combat the charges against you while protecting your future.
If you have found yourself the subject of a federal securities fraud investigation, contact a Florida Securities Fraud Lawyer at Whittel & Melton online or call us statewide and toll- free by dialing (866) 608-5529.