Milgram victorious in helping consumers win $7M in alleged Ponzi scheme
NEWARK, N.J. (Legal Newsline) - A lawsuit filed by New Jersey Attorney General Anne Milgram on behalf of the New jersey Bureau of Securities against alleged fraudulent investment companies came back with a positive $7 million verdict on Thursday.
Defendants James Hankins Jr., Hankins Private Client Group LLC, The Hankins Group Ltd. and Hankins Life Settlement LLC, were ordered to pay approximately $7 million in restitution to defrauded investors and another $220,000 in civil penalties after the judge ruled that they defrauded investors through a Ponzi scheme that they operated.
"Consumers must be wary of advisors who promise consistently high rates of return that are out of line with other financial investments," Milgram said. "They sound too good to be true because they usually are."
During the case, it was revealed that the defendants sold promissory notes to at least 101 investors, with a promised rate of return between 10 percent and 15 percent.
Rather than purchase the rights to viaticals and life insurance settlement policies from beneficiaries as he stated to investors, Hankins used the invested monies for his personal benefit, including the purchase of a vacation home in Florida, fractional interest in a private jet, and the purchase of jewelry and watches.
The judge also found that James Hankins violated the New Jersey Uniform Securities Law by acting as an agent without being registered and by selling unregistered securities.
The ruling also said that the defendants have been permanently barred from the New Jersey securities industry.