National investment fraud and ponzi scheme lawyers KlaymanToskes are investigating on behalf of investors of the alleged (“Permian”) Permian Basin Proppants Ponzi Investment Loss Recovery. Permian is a Texas corporation purportedly supplying materials to energy companies for the extraction of oil and gas using hydraulic fracturing. KlaymanToskes’s investigation is in light of the Securities and Exchange Commission’s December 14, 2021 emergency action filed against Permian and its president and CEO in Texas federal court.
What is Permian Basin Proppants?
According to the Securities and Exchange Commission, Permian was billed as a fast-growing company positioned to capitalize on the Permian Basin oil and gas development boom. The company allegedly would deliver guaranteed investment returns of 10 to 100% in as little to 30 to 90 days.
However, the enterprise is allegedly a scam.
Permian had no material proppant supply operations. Permian’s president and CEO Marco “Sully” Perez allegedly used investors funds to make Ponzi payments and to fund Perez’s extravagant lifestyle resulting in investor losses.
How Did the Permian Ponzi Scheme Work?
According to the SEC’s emergency complaints, Perez allegedly:
Permian also made misstatements about the company’s profitability. For instance, Permian told investors that its investment program could generate an ROI of up to 30%, that the investment was 100% guaranteed, was completely protected, and backed for insurance and bonds. Permian and Perez made these representations to investors in presentations and on the Permian website and social media accounts.
Who Did Perez Target with the Permian Investment Scheme?
Perez allegedly targeted veterans and active service members for the Ponzi scheme. Specifically, Permian allegedly presented Perez as a successful veteran-entrepreneur who went from “military to millionaire.”
Perez Misused Investor Funds on Extravagant Purchases
According to the SEC’s Complaint, Perez misappropriated approximately $5.6 million. The funds, in part, were used as follows:
What are Common Traits of a Ponzi Scheme?
A “Ponzi scheme” is named after Charles Ponzi who was responsible for perpetrating an infamous fraud scheme in the 1920’s. He bilked New England investors by promising a 40% return in 90 days.
In today’s investment news, investors have become familiar with this fact pattern from similar modern day scams, such as the Bernie Madoff case. Ponzi schemes are unsustainable and discovered when new victim investments cannot keep pace with the returns paid to previously victimized investors. Periods of declining markets will often uncover the wrongdoing when investor demands for withdrawals deplete the remaining funds.
Ponzi schemes are able to grow because the wrongdoer is associated with or otherwise connected to a reputable brokerage firm, insurance company, accounting firm, or law firm which either fails to properly supervise its agent, fails to question red flags, or fails to comply with its own internal or professional guidelines on how it must monitor its agents.
In many instances, Ponzi schemes like Permian target those investors who are least able to withstand the losses. The victims tend to be unsophisticated investors who are many times referred by family members, close friends, or members of a group with strong affiliation.
Common characteristics or tactics employed by the perpetrators of Ponzi scheme fraud include:
Ponzi schemes are also frequently affinity frauds where the wrongdoer is able to convince a large group of connected investors to invest in a fraudulent investment program because they all belong to the same religious organization or ethnic background.
Types of investments Involved in Ponzi schemes:
How Can I Protect Myself from Ponzi schemes?
There are several ways investors can protect themselves from becoming Ponzi scheme victims. First, consider the SEC’s tips for avoiding affinity fraud, which is cited in the SEC’s Press Release on the Permian Ponzi Scheme and copied below:
KlaymanToskes is dedicated to the protection of investor rights. Our Ponzi scheme attorneys represent victims of Ponzi schemes on a contingency fee basis. Our law firm has the experience and knowledge to help determine who may be a responsible party when the perpetrators do not have the assets necessary to recover losses.
Ponzi Scheme Investment Loss Recovery for Permian Basin Proppants Ponzi Scheme
Investors who incurred over $250,000 in losses in the Permian Ponzi scheme, and those who have information relating to the sales practices of Perez and Permian in furtherance of the Ponzi scheme, are encouraged to contact Lawrence L. Klayman, Esq. at (561) 542-5131.
About Us
KlaymanToskes is a leading national securities law firm, specializing in recovering investment losses for Ponzi scheme victims, which practices exclusively in the field of securities arbitration on behalf of retail and institutional investors throughout the world in large and complex securities matters. KlaymanToskes has recovered more than $225 million for investors in FINRA arbitrations. KlaymanToskes has office locations in California, Florida, New York, and Puerto Rico.
Contact
KlaymanToskes
Lawrence L. Klayman, Esq.
(561) 542-5131
lklayman@klaymantoskes.com
www.klaymantoskes.com