The U.S. Securities and Exchange Commission (SEC) has charged three Dallas-Fort Worth residents-Kenneth W. Alexander II, Robert D. Welsh, and Caedrynn E. Conner-with orchestrating a $91 million Ponzi scheme targeting over 200 investors, according to a complaint filed in federal court.
Scheme Mechanics
- False Promises: Defendants allegedly guaranteed investors 3–6% monthly returns via the Vanguard Holdings Group Irrevocable Trust (VHG), claiming profits from a fictitious “billions in assets” international bond trading operation.
- Ponzi Structure: Returns were paid using new investor funds, not legitimate revenue.
- “Pay Order” Scam: Investors were offered a purported financial instrument to “protect” their principal, which the SEC asserts was entirely fraudulent.
- Misappropriation: Alexander and Conner diverted millions for personal luxuries, including Conner’s $5 million home purchase.
SEC Allegations
- Violations: Antifraud and securities registration laws.
- Relief Sought: Permanent injunctions, disgorgement of profits plus interest, and civil penalties.
Key Quote
“The defendants caused devastating losses while misappropriating millions. We remain unwavering in holding fraudsters accountable.”
Sam Waldon, SEC Acting Enforcement Director
Case Details
- Jurisdiction: U.S. District Court for the Eastern District of Texas.
- Investigation Team: Led by Catherine Rowsey, Tamara McCreary, and Carol Hahn (Fort Worth SEC Office).
- Litigation: Jason Rose, supervised by Keefe Bernstein.
🔗 Source: SEC Press Release
This case underscores the SEC’s intensified focus on high-yield investment frauds exploiting trust structures. FinCrime Observer advises heightened due diligence on “guaranteed return” offerings involving unregistered securities.
Stay vigilant. Report suspicious activity to our whistleblower platform Whistle42.