SEC Charges Four in Fraudulent “Free Dinner” Scheme
The SEC charged Joseph Andrew Paul, John D. Ellis, Jr., James S. Quay (using alias 'Stephen Jameson'), and Donald H. Ellison with orchestrating a senior-targeted fraud through fake 'free dinner' investment seminars, using falsified performance data to raise at least $1.2 million, most of which was stolen rather than invested, with Quay and Ellison unregistered and Quay having prior fraud convictions.
The SEC charged four individuals—Joseph Andrew Paul, John D. Ellis, Jr., James S. Quay, and Donald H. Ellison—with securities fraud and misrepresentation for targeting seniors via 'free dinner' seminars in Florida. Paul and Ellis created fraudulent marketing materials, including performance figures copied from another firm’s website, while Quay, using the alias 'Stephen Jameson,' and Ellison recruited victims, despite neither being registered investment professionals during the scheme. At least $1.2 million was raised, but most funds were not invested and were instead split among the defendants, with Quay having prior convictions for tax fraud and a 2012 SEC securities fraud liability.
The SEC charged Joseph Andrew Paul, John D. Ellis, Jr., James S. Quay, and Donald H. Ellison with orchestrating a fraud targeting seniors through mass-mailing invitations to 'free dinner' investment seminars in Florida. Paul and Ellis, Philadelphia residents, fabricated misleading marketing materials, including performance data 'cut and pasted' from another firm’s website, while Quay—using the alias 'Stephen Jameson'—and Ellison, a Palm Bay resident, directly recruited victims at Tampa-area events. Quay, previously convicted of tax fraud in 2005 and found liable for securities fraud in a 2012 SEC action, and Ellison were both unregistered as investment professionals during the scheme. The SEC alleges that at least $1.2 million was raised from victims, but the vast majority was never invested and instead was divided among the defendants as personal gain. The complaint, filed in the U.S. District Court for the Eastern District of Pennsylvania, also charges them with misrepresentation and unregistered brokerage activity. The investigation was led by SEC staff from the Philadelphia Regional Office, with litigation to be handled by David L. Axelrod and Mark R. Sylvester. The SEC emphasized that investors can verify professional registration status through Investor.gov to avoid similar scams.
Exhibits & Attached Documents (2)
Extracted insights
- person Brendan P. McGlynn
- person David L. Axelrod
- person Donald H. Ellison
- person G. Jeffrey Boujoukos
- person investment professional
- person James S. Quay
- person John Cajulis
- person Joseph Andrew Paul
- person Lisa M. Candera
- person Mark R. Sylvester
- person Michael K. Nally
- agency sec investigation
- agency sec litigation
- agency sec philadelphia regional office
- agency Securities and Exchange Commission
- agency securities fraud in 2012 sec enforcement action
- person sharon binger
- person Stephen Jameson
- person Steven R. Dittert
- person William M. Lavin
- SEC charged Joseph Andrew Paul, John D. Ellis Jr., James S. Quay, Donald H. Ellison
- Joseph Andrew Paul is resident of Philadelphia
- John D. Ellis Jr. is resident of Philadelphia
- James S. Quay is resident of Atlanta
- Donald H. Ellison is resident of Palm Bay, Florida
- Joseph Andrew Paul lied about track record of investment advisory firm
- John D. Ellis Jr. lied about track record of investment advisory firm
- Joseph Andrew Paul created fraudulent marketing materials with cut and pasted performance numbers
- John D. Ellis Jr. created fraudulent marketing materials with cut and pasted performance numbers
- James S. Quay used alias Stephen Jameson
- James S. Quay convicted of tax fraud in 2005
- James S. Quay found liable for securities fraud in 2012 SEC enforcement action
- James S. Quay was not registered as investment professional
- Donald H. Ellison was not registered as investment professional for majority of period
- Sharon Binger is Director of SEC Philadelphia Regional Office
- Lisa M. Candera conducted SEC investigation
- Brendan P. McGlynn conducted SEC investigation
- G. Jeffrey Boujoukos supervised SEC investigation
- David L. Axelrod will lead SEC litigation
- Mark R. Sylvester will lead SEC litigation
- Michael K. Nally conducted examination leading to investigation
- William M. Lavin conducted examination leading to investigation
- John Cajulis conducted examination leading to investigation
- Steven R. Dittert supervised examination leading to investigation
The Securities and Exchange Commission today announced that it has charged four individuals in a fraud whose victims included seniors who were solicited at “free dinner” investment seminars in Florida. The SEC alleges that Philadelphia residents Joseph Andrew Paul and John D. Ellis, Jr. lied about the track record of their investment advisory firm and recruited James S. Quay of Atlanta and Donald H. Ellison of Palm Bay, Florida, to lure potential victims with promises of lofty returns. According to the SEC’s complaint, Paul and Ellis created fraudulent marketing materials including some with performance numbers that were “cut and pasted” from another firm’s website. The complaint further alleges that Quay and Ellison used these materials to mislead seniors who responded to their mass-mailing offer of a free dinner at a Tampa restaurant. “As we allege in our complaint, a large portion of the money was never invested but instead was split among these self-described investment experts whose only real expertise was stealing other people’s money,” said Sharon Binger, Director of the SEC’s Philadelphia Regional Office. According to the SEC’s complaint filed in the U.S District Court for the Eastern District of Pennsylvania, Quay used an alias, “Stephen Jameson,” to conceal his true identity from potential victims. Quay was previously convicted of tax fraud in 2005 and found liable for securities fraud in a 2012 SEC enforcement action. “Jameson” was not registered as an investment professional during the relevant period of fraudulent conduct, and Ellison also was not registered for the majority of that period. Investors can easily and quickly check the registration status and disciplinary history of investment professionals by using the searchable database on the SEC’s Investor.gov website. The SEC’s investigation was conducted by Lisa M. Candera and Brendan P. McGlynn and supervised by G. Jeffrey Boujoukos. David L. Axelrod and Mark R. Sylvester will lead the SEC’s litigation. The examination that led to the investigation was conducted by Michael K. Nally, William M. Lavin, and John Cajulis, under the supervision of Steven R. Dittert.
The Securities and Exchange Commission today announced that it has charged four individuals in a fraud whose victims included seniors who were solicited at “free dinner” investment seminars in Florida. The SEC alleges that Philadelphia residents Joseph Andrew Paul and John D. Ellis, Jr. lied about the track record of their investment advisory firm and recruited James S. Quay of Atlanta and Donald H. Ellison of Palm Bay, Florida, to lure potential victims with promises of lofty returns. According to the SEC’s complaint, Paul and Ellis created fraudulent marketing materials including some with performance numbers that were “cut and pasted” from another firm’s website. The complaint further alleges that Quay and Ellison used these materials to mislead seniors who responded to their mass-mailing offer of a free dinner at a Tampa restaurant. “As we allege in our complaint, a large portion of the money was never invested but instead was split among these self-described investment experts whose only real expertise was stealing other people’s money,” said Sharon Binger, Director of the SEC’s Philadelphia Regional Office. According to the SEC’s complaint filed in the U.S District Court for the Eastern District of Pennsylvania, Quay used an alias, “Stephen Jameson,” to conceal his true identity from potential victims. Quay was previously convicted of tax fraud in 2005 and found liable for securities fraud in a 2012 SEC enforcement action. “Jameson” was not registered as an investment professional during the relevant period of fraudulent conduct, and Ellison also was not registered for the majority of that period. Investors can easily and quickly check the registration status and disciplinary history of investment professionals by using the searchable database on the SEC’s Investor.gov website. The SEC’s investigation was conducted by Lisa M. Candera and Brendan P. McGlynn and supervised by G. Jeffrey Boujoukos. David L. Axelrod and Mark R. Sylvester will lead the SEC’s litigation. The examination that led to the investigation was conducted by Michael K. Nally, William M. Lavin, and John Cajulis, under the supervision of Steven R. Dittert.