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Black churches victim of Ponzi scheme

/ Source: The Associated Press

The Los Angeles area’s black community was the chief victim of a Ponzi scheme that took at least $8 million from investors, the Securities and Exchange Commission alleged Thursday as it shut down two companies it said were involved.

Investors, some solicited through some of the area’s largest black churches, were allegedly told they would be lending the money to government contractors and would see returns of 10 percent to 20 percent a month.

Investors were paid not in profits from the contracts, but in fees collected from their fellow investors, dozens of whom were paid extra for bringing in new clients, the SEC alleges.
The SEC said the Riverside-based firms may have collected much more than $8 million by soliciting investors at “lavish” sales events — including a lobster and prime rib dinner Oct. 22 at the Ritz-Carlton hotel in Marina Del Rey that attracted nearly 500 people.

Boxer Mike Tyson attended the dinner as the guest of honor, said Lisa A. Gok, an SEC assistant regional director.
A federal judge on Wednesday granted the SEC’s request for a temporary restraining order and asset freeze for Ohana International Inc., Financial Solutions, and 44-year-old Christiano Hashimoto of Riverside, the president of both companies.

The judge also appointed a temporary receiver for the two companies, with a decision on permanent sanctions set for Nov. 12.
The telephone at Financial Solutions rang unanswered Thursday. An e-mail to Hashimoto brought no immediate response. The company’s corporate attorney, David Michael, did not immediately return a telephone message from The Associated Press.