A Mount Kisco woman who played a part in a global fraud scheme has consented to U.S. Securities and Exchange Commission sanctions.
The SEC accused Joan E. Powell, 68, of helping to defraud thousands of investors with promises of astronomical returns on bogus investments, in a civil complaint filed March 27 in U.S. District Court, Brooklyn. Her brother, Wayne H. McLean, 64, of Lithonia, Georgia, also was charged.
From 2012 to 2019, ringleader, Roger Karlsson offered investments in a fund supposedly operated by Eastern Metal Securities. For less than $100 per share, investors were told, they would eventually be paid with 1.15 kg of gold per share.
But the fund was worthless. There was no gold. No payouts were made.
Karlsson, a citizen of Sweden, used investors’ funds to buy a resort and expensive homes in Thailand.
He was extradited from Thailand, and in 2021 he pled guilty in federal court in San Francisco to securities fraud and money laundering for stealing more than $16 million from 3,500 people. He was sentenced to 15 years in prison and ordered to pay $8.5 million in restitution and to forfeit $16.3 million and the Thailand properties.
From 2014 to 2019, Powell and McLean touted the EMS fund on podcasts and through emails, phone calls, and direct contacts, according to the SEC complaint.
McLean referred to investors as new millionaires or billionaires, on his podcast.
He intimated that a “Mr. X” was involved with EMS and then identified Mr. X as the chairman of the Federal Reserve.
Listeners to a 2014 podcast were told that EMS shares that had sold for less than $100 were now worth $44,000, or 1.15 kg of gold.
Powell and McLean claimed that they were merely helping investors and did not get paid for their advice.
“In reality,” the SEC complaint states, “McLean and Powell misappropriated funds that EMS investors sent them to purchase shares, including spending investor funds on their personal expenses.”
They kept some of the money for themselves and transferred the rest to accounts controlled by Karlsson.
Powell collected nearly $2 million from would-be investors, according to the SEC. In December 2017 alone, she received about $18,000 and spent half on credit card payments, store goods, insurance, utilities, fuel and parking costs.
McLean collected more than $250,000, transferred about $40,000 to accounts controlled by Powell, and spent thousands of dollars on personal expenses such as food and store goods.
The siblings consented to sanctions in March and the SEC disclosed the agreement in a May 9 press release.
Without admitting or denying wrongdoing, Powell and McLean agreed to court orders permanently restraining them from violating SEC regulations and from acting as an officer or director of any company that issues registered securities.
They agreed to disgorge all ill-gotten gains and to pay civil penalties, in amounts to be determined by the court.
