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SEC freezes China Voice assets, cites Ponzi scheme

JayAtl

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Nov 18, 2010
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SEC freezes China Voice assets, cites Ponzi scheme - Yahoo! News


NEW YORK (Reuters) – The Securities and Exchange Commission on Friday said it won a court order freezing the assets of China Voice Holding Corp, and accused a co-founder of the telecommunications company of running an $8.6 million Ponzi scheme.

In a lawsuit, the SEC said China Voice, former Chief Executive William Burbank, 52, former Chief Financial Officer David Ronald Allen, 60, and others fraudulently overstated the company's financial condition and business activity in China.

"Since at least 2006, China Voice, Allen, Burbank and others have made false and misleading public statements about China Voice, to maintain the facade of a prosperous company, while masking the unjust enrichment of the principals," the complaint filed in the U.S. district court in Dallas said.

The SEC said the Ponzi scheme involved false promises made to investors by Allen and two accomplices: Alex Dowlatshahi, 36, and Christopher Mills, 34.

According to the regulator, the men promised investors annual returns of least 25 percent with "minimal risk" on investments in at least 16 limited partnerships.

Instead, the SEC said they used money to repay investors in earlier partnerships, fund China Voice and other companies that Allen controls, and enrich themselves and family members.

The SEC also accused shareholders Gerald Patera, 69, and Ilya Drapkin, 34, of helping Allen finance promotions to drive up China Voice's share price, including a "blast fax" campaign, and dumping millions of China Voice shares onto the market.

"This fraud illustrates that when extraordinarily high returns are promised in a supposedly low-risk investment, that's a tell-tale sign that something likely is amiss," said Stephen Cohen, an associate director in the SEC enforcement division, in a statement.

The SEC and other regulators have in recent years spent more resources cracking down on alleged Ponzi schemes after failing to uncover Bernard Madoff's fraud faster.

A China Voice spokesman did not immediately return a call seeking a comment. Calls to Allen's and Burbank's homes were not answered. Patera said "I'm shocked" at the lawsuit. Drapkin was not immediately available for comment. Dowlatshahi and Mills could not be reached.

China Voice is based in Boca Raton, Florida. More than 20 defendants are named in the lawsuit. Several have ties to Texas, where the lawsuit was filed.

The lawsuit seeks to impose civil fines, bar Allen and Burbank from participating in penny stock offerings or serving as corporate officers and directors, and other remedies.

The case is SEC v. Allen et al, U.S. District Court, Northern District of Texas, No. 11-00882.

For the SEC: Jane Peterson, Carolyn Welshhans, David Herman, Jennifer Leete, Toby Galloway and Stephen Cohen.
 
we should do a Chinese on these guys:sniper:- but alas the better human rights and leader of free worlds in me cannot condone such actions- but whats the deal to pull in Chinese markets on these deals . Still not clear what their ties are to china- tv reports eluded to some.

China Voice Holding Corp. (CHVC), incorporated August 7, 2003, is a diversified telecommunications company. The Company operates in two countries: the United States and China. CHVC, through its subsidiaries, offers network design and international office-automation software and technology services to third party customers and government agencies in the People’s Republic of China. The Company provides voice over Internet protocol (VoIP) telephone services, office automation, wireless broadband, unified messaging, video conferencing, mobility services, and other advanced voice and data services. On January 29, 2009, the Company sold its six subsidiaries, which it had operated in the United States in the telecommunications services, calling card distribution and advanced hardware distribution segments. In April 2011, the Company acquired NTELEC Networks, LLC.


The Company’s wholly owned subsidiaries include VoIUM Technologies, LTD, Sino-Connection Corp., Voium USA Inc., SteamJet Net, Inc., Sino Beyond Ltd., Vastland Holding Beijing Co. Ltd. and East West Global Communications, Inc
 
we should do a Chinese on these guys:sniper:- but alas the better human rights and leader of free worlds in me cannot condone such actions- but whats the deal to pull in Chinese markets on these deals . Still not clear what their ties are to china- tv reports eluded to some.

ok so a couple of chinese companies are dishonest and runs a ponzi scheme, i could sit here all day and name the american and india companies that have ripped of other people far worst than this, whats your point there mr. better human rights and leader of the free world(i assume ur using the american part of ur identity here)
 
LOL..... what a bunch of clowns these illiterates are

Chief Executive William Burbank, 52, former Chief Financial Officer David Ronald Allen, 60, and others fraudulently overstated the company's financial condition and business activity in China.
 

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