SEC Halts Billion
Coupons BCI, CEO Marvin R. Cooper's Alleged $4.4M Ponzi Scheme Targeting
Feb. 19, 2009
Securities and Exchange Commission has obtained a court order halting a
Ponzi scheme that specifically targeted members of the Deaf community in
the United States and Japan.
The SEC alleges that Hawaii-based Billion Coupons, Inc. (BCI) and its
CEO Marvin R. Cooper raised $4.4 million from 125 investors since at
least September 2007 by, among other things, holding investment seminars
at Deaf community centers. The SEC also alleges that Cooper
misappropriated at least $1.4 million in investor funds to pay for a new
home and other personal expenses. The order obtained by the SEC freezes
the assets of BCI and Cooper.
"This emergency action shows that the Commission will act quickly and
decisively to help victims of affinity fraud," said Linda Chatman
Thomsen, Director of the SEC's Division of Enforcement.
"A Ponzi scheme targeting members of the Deaf community is particularly
reprehensible," said Rosalind R. Tyson, Regional Director of the SEC's
Los Angeles Regional Office. "This case is an example of successful
coordination between federal and state agencies to protect vulnerable
The SEC's complaint, filed yesterday in federal court in Honolulu,
alleges that BCI and Cooper represented to the investors that their
funds would be invested in the foreign exchange (Forex) markets, that
investors would receive returns of up to 25 percent compounded monthly
from such trading, and that their investments were safe. According to
the complaint, BCI and Cooper actually used only a net $800,000 (cash
deposits minus cash withdrawals) of investor funds for Forex trading,
and they lost more than $750,000 from their Forex trading. The complaint
further alleges that BCI and Cooper failed to generate sufficient funds
from their Forex trading to pay the promised returns, and instead
operated as a Ponzi scheme by paying returns to existing investors from
funds contributed by new investors.
SEC alleges that BCI and Cooper have violated the registration and
antifraud provisions of the federal securities laws. In its lawsuit, the
SEC obtained an order temporarily enjoining BCI and Cooper from future
violations of these provisions. The SEC also obtained an order: (1)
freezing the assets of BCI and Cooper; (2) appointing a temporary
receiver over BCI; (3) preventing the destruction of documents; (4)
granting expedited discovery; and (5) requiring BCI and Cooper to
provide accountings. The Commission also seeks preliminary and permanent
injunctions, disgorgement, and civil penalties against both defendants.
A hearing on whether a preliminary injunction should be issued against
the defendants and whether a permanent receiver should be appointed is
scheduled for March 2, 2009, at 9 a.m. HST.
The Commodity Futures Trading Commission (CFTC) also filed an emergency
action yesterday against BCI and Cooper, alleging violations of the
antifraud provisions of the Commodity Exchange Act. The State of
Hawaii's Department of Commerce and Consumer Affairs (DCCA), Office of
the Commissioner of Securities, issued a preliminary order to cease and
desist against BCI and Cooper.
The Commission acknowledges the assistance of the Hawaii DCCA's Office
of the Commissioner of Securities and the assistance of the CFTC in this