The Securities and Exchange Commission (SEC) has charged Frank Bluestein, of Detroit, Michigan, with fraud, alleging that he scammed many elderly investors into investing into a $250 million ponzi scheme. It is claimed by the SEC that Bluestein focused his efforts on elderly investors, costing many of them their retirement and even their homes.
Bluestein is said to have been the largest salesperson at E-M Management, the ponzi scheme operated by Edward May. The SEC has already filed charges against both Edward May and E-M Management. The SEC alleges that Bluestein would use investment seminars to reach potential investors, often convincing elderly investors to refinance their homes to invest. The SEC says that Bluestein falsely assured investors that these “investments” were safe. Additionally, the SEC claims that Bluestein mislead investors into believing that he conducted a thorough investigation of the investments, when in fact he did little, if anything, to determine the legitimacy of E-M Management’s offerings. The SEC also alleges that Bluestein did not disclose the compensation he was receiving from E-M Management for touting their investments. It is said that Bluestein received $1.4 million in compensation from investor funds and $2.4 million in the form of commissions.
The SEC alleges that Bluestein, through his company Maximum Financial’s investment seminars, was able to raise approximately $74 million dollars from over 800 investors over the course of five years.
The SEC is seeking a permanent injunction to prevent Bluestein from engaging in future fraudulent conduct, as well as disgorgement of ill-gotten gains and financial penalties.