The Securities and Exchange Commission (SEC) last week charged two Texas companies and their principals in a fraud targeting the elderly. The SEC’s complaint alleges that Clifton Stanley ran a ponzi scheme through his retirement planning and real estate investment business, The Lifepay Group, from 2010 until 2017. Stanley allegedly told at least 30 retirees and elderly victims to invest $2.4 million of their retirement savings with promises of claims of outsized investment returns. He then convinced the victims to roll over their investments and paid off early investors with funds from newer ones.
It was further alleged that Stanley pilfered from the estate of an elderly woman’s family trust, diverting nearly $100,000 to his Lifepay scheme. In 2015, Stanley and Michael E. Watts orchestrated a second offering fraud through, SMDRE, a company they controlled. They used misrepresentations to convince a group of elderly victims to invest $1.4 million in SMDRE. Stanley then used $1.3 million of the Lifepay offering proceeds for country club memberships, living expenses, travel and entertainment expenses. Watts and Stanley then engaged in shell game transactions so they could use the vast majority of SMDRE funds for personal expenses. The claim charges Stanley, Watts, Lifepay and SMDRE with violating the registration and antifraud provisions of the federal securities laws. Stanley was also charged for conduct stemming from his role as an unregistered broker.
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