Judgment entered in alleged Ponzi scheme
DALLAS (Legal Newsline) - A final judgment against Ilya Drapkin was entered July 6 in Texas federal court that permanently enjoins him from violating federal securities laws and orders monetary relief.
Drapkin and his company MGTK Corp. will pay $3,754,004 in disgorgement and prejudgment interest and a civil penalty of $1,554,080.
An additional payment of $493,606 in disgorgement and prejudgment interest will also be paid. Drapkin and his other company SMIChips, Inc. will pay $74,270 in disgorgement and prejudgment interest. This represents the total profits gained of a Ponzi scheme allegedly run by China Voice's former CFO David Ronald Allen and other associates.
The SEC accused China Voice, Allen, and former CEO and President William F. Burbank IV of making "a series of false and misleading statements and omissions regarding China Voice's financial condition and business prospects. In addition, the SEC charged China Voice shareholders Drapkin and Gerald Patera with financing stock promotion campaigns regarding China Voice.
These campaigns included a blast fax campaign conducted by Robert Wilson. The SEC said that Allen, with the assistance of Alex Dowlatshahi and Christopher Mills, started what eventually became a Ponzi scheme seeking to raise at least $8.6 million from investors around the country.