The U.S. Securities and Exchange Commission has accused a New Rochelle man of defrauding fellow members of the Grail Movement, losing most of the $698,000 invested by nine members of the religious organization.
The SEC accused Evarist C. Amah of five violations of securities laws in an Aug. 9 complaint filed in U.S. District Court, White Plains.
Amah, 54, was CEO of ECA Capital Management LLC of New Rochelle. The firm was founded in 2012, according to a state corporation record, and dissolved in June 2020.
From 2016 to 2019, the SEC charges, Amah made false and misleading statements to investors. For instance, he allegedly told eight clients that he had achieved modest gains of 3% to 5% when he had actually lost 97% of their assets.
Then he allegedly fabricated performance reports to conceal his misconduct, showing, for instance, total assets of $439,751 for several clients when the actual balance was $4,907.
Amah created the Mountain Support Initiative – Investment Trading, and the MOSI-IT Special Project, ostensibly as investment programs to benefit clients and the Grail Movement, an organization inspired by Oskar Ernst Bernhardt (1875-1941), a German who wrote “In the Light of Truth: The Grail Message, under the pen name Abd-ru-shin.
Neither investment program was created as a legal entity, the SEC said, and they were operated through ECA Capital and Amah’s personal brokerage accounts.
At the end of each year, Amah told clients that some of the profits would be distributed to the investors and some would be donated to the Mountain, a settlement in Vomperberg, Austria, where the Grail Movement hosts festivals and other religious activities.
He told a client in 2016 that he projected annual returns of about $1 million by the third year, when he had already lost more than half of the invested funds.
Amah created a spreadsheet that projected annual returns of more than 75%, according to the complaint, and $1.5 million in donations to the Mountain over a three-year period.
“Amah knew, or was reckless in not knowing,” the SEC says, that his statements were “materially false and misleading.”
Clients, mostly from Nigeria and Italy, wired funds to ECA Capital’s bank account in Pelham, according to the complaint. Then Amah transferred the funds to accounts in New York and Nebraska.
In 2019, Amah admitted for the first time that he made some bad trades, according to the complaint, but even then he minimized the losses to nearly 37% since inception, rather than nearly 100%.
The SEC is asking the court to restrain Amah from violating securities laws and to make him disgorge all ill-gotten gains and pay an unspecified civil penalty.
