SEC v. Howard S. Kleyman

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MINNESOTA
_______________________________________
     :
U.S. SECURITIES AND EXCHANGE  :
COMMISSION,     :
       :  CASE NO. 21-cv-1943
 Plaintiff,     :
     :     COMPLAINT
 v.      :
       :
HOWARD S. KLEYMAN,    :
       :
 Defendant     :
______________________________________ :
COMPLAINT
  Plaintiff United States Securities and Exchange Commission (the “Commission”)
alleges as follows:
NATURE OF THE ACTION
1. From at least July 2017 through July 2019, Howard S. Kleyman
(“Kleyman” or “Defendant”), who – at that time – was a lawyer licensed in Minnesota,
participated in a “prime bank” scheme in which at least nine investors lost over $1.22
million.
2. Kleyman served as a “paymaster” in at least nine transactions in which
investors paid advanced fees to his attorney trust accounts, ostensibly to purchase, lease,
and/or monetize purported bank instruments such as standby letters of credit or bank
guarantees from The Hanson Group of Companies S.A. (“Hanson Group”).  In fact, these
were fictional “prime bank” investments.
3. Prime bank instruments and trading programs such as those for which

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Kleyman served as paymaster are fictitious.  The Commission, the FBI, the Federal
Reserve Bank, the International Monetary Fund, and other federal and international
authorities have publicly denounced these bank instrument program frauds in easily
obtainable public information.
4. Kleyman knew or was reckless in not knowing that investors were relying
on Kleyman, an attorney, to keep their funds safe and to disburse funds only upon
successful completion of the transactions.  Instead, Kleyman blindly disbursed the funds,
without conducting any inquiry into whether the investors had received their promised
instruments or funding.
5. Kleyman had no basis to believe that the purported bank instruments
existed, or that they had any value.  In fact, Kleyman learned of many red flags
suggesting that these transactions were fraudulent.
6. Kleyman collected $12,499.12 in fees for the nine transactions for which he
served as paymaster.  These fees were paid from the defrauded investors’ funds.
7. Despite the serial failure of these prime bank investments, complaints from
investors, and the lack of any evidence that these transactions had been or could be
completed successfully, Kleyman continued his involvement in prime bank schemes.  In
fact, even after he stopped acting as a paymaster, Kleyman participated in prime bank
transactions in other ways.
8. Through the foregoing conduct and as alleged further below, Kleyman
engaged in transactions, acts, practices, and courses of business that violated Section
17(a)(1) and (3) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. 77q(a)(1) and

3
(3)], Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C.
78j(b)] and Exchange Act Rules 10b-5(a) and (c) [17 C.F.R 240.10b-5(a) and (c)].
9. The Commission brings this action to put a stop to Kleyman’s violations of
the federal securities laws, to prevent further harm to investors, and to seek disgorgement
and civil penalties from Kleyman stemming from his violations of the securities laws.
JURISDICTION AND VENUE

10. The Commission brings this action under Section 20(b) of the Securities
Act [15 U.S.C. §77t(b)] and Sections 21(d) and 21(e) of the Exchange Act [15 U.S.C.
§§78u(d) and 78u(e)].
11. This Court has jurisdiction over this action under Section 22 of the
Securities Act [15 U.S.C. § 77v] and Section 27 of the Exchange Act [15 U.S.C. § 78aa].
12. Venue is proper in this Court under Section 27 of the Exchange Act [15
U.S.C. § 78aa].  Many of the acts, practices, and courses of business constituting
violations alleged herein have occurred within the jurisdiction of the United States
District Court for the District of Minnesota.
13. Kleyman resides and conducts business within the District of Minnesota.
14. Kleyman directly and indirectly made use of the means and
instrumentalities of interstate commerce and of the mails in connection with the acts,
practices, and courses of business alleged herein, and will continue to do so unless
enjoined.
DEFENDANT AND RELATED PARTIES
15. Howard S. Kleyman, age 79, is a resident of St. Paul, Minnesota.  Until

4
his recent disbarment by the Minnesota Supreme Court, Kleyman was an attorney
licensed to practice in Minnesota.  See In re Petition for Disciplinary Action against
Howard S. Kleyman, A20-1304 (Minn. Sup. Ct. June 9, 2021).
16. The Hanson Group of Companies S.A. (“Hanson Group”) is
Panamanian company purporting to sell, lease, and monetize bank instruments to
investors through the internet and brokers.
17. Harold Soto Boigues aka Harold Soto (“Soto”), age 41, is a citizen of the
Dominican Republic.  His current residence is unknown.  He is the CEO of Hanson
Group.
FACTS
A. Kleyman’s Previous Involvement with Soto and Prime Bank Schemes

18. The nine transactions for which he acted as paymaster for Hanson Group
were not Kleyman’s first foray into prime bank schemes.  In fact, Kleyman had been
pursuing prime bank instrument transactions for about four years before he began acting
as paymaster for Hanson Group.  Every transaction he attempted failed.
19. Beginning in approximately 2013, Kleyman, together with an associate,
pursued a series of transactions, seeking to obtain financing using bank instruments such
as bank guarantees and standby letters of credit.  All of those transactions failed.
20. In 2015, Kleyman attempted another transaction, this time with a group that
included Soto and Hanson Group, as well as James Louks and FiberPoP UK Ltd.
(“FiberPoP UK”).  FiberPoP UK – a company with no assets or operations – purportedly
issued several €500 million bonds, which it planned to use to secure hundreds of millions

5
of Euros in bank guarantees, which would fund trading programs and generate enormous
returns.  Hanson Group, through Soto, facilitated this purported transaction.  Ultimately,
the transaction failed.  FiberPoP UK investors in the United States lost at least $250,000,
some of which flowed through Kleyman’s accounts.
21. On September 1, 2015, the Commission brought fraud charges against
Louks and his company, FiberPoP Solutions, Inc.  The complaint accused Louks and
FiberPoP of funneling investor funds into a series of prime bank schemes, including the
scheme described above.  See SEC v. Louks et al., 15-cv-3456 (D. Minn.).  The
Commission obtained a Final Judgment against the defendants on January 13, 2017.  Id.
(DE 97).
22. In connection with the Louks matter, the Commission deposed Kleyman in
October 2015.  Commission staff showed Kleyman a warning notice from the FBI about
common fraud schemes.  The FBI warned of “Letter of Credit Fraud” and “Prime Bank
Note Fraud,” otherwise known as a prime bank scheme, where fraud artists offer letters of
credit or bank guarantees as an investment, and claim to generate extremely high returns.
In this notice, the FBI warned that investments in letters of credit “simply do not exist,”
and that “bank guarantees are never traded or sold by any kind of market.”
23. After the failed FiberPoP UK transaction, but before Kleyman provided any
paymaster services to Hanson Group, Kleyman participated yet another scheme with
Soto.  Soto gave Kleyman a debit or credit card in a third party’s name and instructed
Kleyman to charge thousands of dollars to the card using a beauty salon that Kleyman
owned.  Kleyman then disbursed those funds to Soto and another associate.  The card

6
processor eventually reclaimed $17,000 from Kleyman’s salon, threatening his business,
and causing Kleyman to question whether the card was stolen or the transaction was
otherwise fraudulent.
24. Despite the serial failure of these schemes, the Commission’s Louks
lawsuit, the FBI warning, and the dubious credit card scheme, Kleyman agreed to act as
paymaster for Soto and Hanson Group.
B. Hanson Group’s Prime Bank Scheme Offerings
25. Hanson Group offered to sell and lease bank instruments such as standby
letters of credit, bank guarantees, bank drafts, and medium term notes through its public
website and brokers.  Investors were required to pay a deposit of between €75,000 and
€500,000, depending on the size of the financial instrument.
26. Hanson Group also offered to “monetize” these bank instruments, meaning
it offered to use bank instruments produce enormous returns for investors.
27. Hanson Group’s promises of financial instruments and monetization were a
ruse.  Investors did not receive the instruments or the financial returns they were
promised.
28. The investments offered by Hanson Group bore many of the indicia of
prime bank schemes the FBI warns about in the notice described above.  For example,
Hanson Group required investors to enter into strict non-disclosure agreements, offered
returns in “a year and a day,” and touted instruments from the “top hundred [aka prime]
banks.”  The instruments Hanson Group offered – standby letters of credit and bank
guarantees – are typical of prime bank schemes.

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29. On its public website, Hanson Group claimed that it only earned funds if
the investor received his or her desired funding.  It also claimed that investors’ initial
deposit was 100% protected.  These statements were false.  As explained below,
Kleyman disbursed investors’ fees to Soto or at Soto’s direction just days after they
tendered payment, without determining that the transactions succeeded.
30. On its website, Hanson Group also touted the involvement of its “attorney’s
office client trust account” as one of three levels of “protection” afforded to its investors.
C. Kleyman’s Paymaster Services
31. From approximately January 2016 through July 2019, Kleyman served as
paymaster for Hanson Group.
32. Kleyman conducted no due diligence on or vetting of Soto before or during
his time as paymaster for Hanson Group.  The only due diligence Kleyman performed on
Hanson Group itself was a brief review of the landing page of the Hanson Group website.
33. Kleyman operated under an agreement with Hanson Group dated January
11, 2016 which set the terms of Kleyman’s duties as paymaster (the “Paymaster
Agreement”).  Among other things, the Paymaster Agreement stated that “[f]or the
avoidance of doubt, Payments shall only be made to the Beneficiaries if a relevant
Transaction has successfully been concluded.”
34. As paymaster, Kleyman accepted investors’ funds into his attorney trust
account.  Then, upon receiving instructions from Soto, Kleyman disbursed the investors’
funds to Soto, Soto’s wife, and others.  Kleyman typically disbursed the funds within
several days of receipt.

8
35. Before disbursing funds, Kleyman did not perform any inquiry to determine
whether the investors had received their requested bank instruments.  In fact, Kleyman
never saw any evidence that Soto had ever provided a Hanson Group investor with a
bank instrument that had any value.
36. For his paymaster service, Kleyman was to receive a fee equal to one
percent of the funds deposited into his account.
37. Under at least three of the agreements between Hanson Group and
investors, which Kleyman reviewed, Kleyman himself was supposed to send the bank
instruments to the investors.  However, Kleyman never sent any bank instruments to any
investors.
38. Kleyman performed paymaster services for at least nine transactions
between July 2017 and July 2019.
39. For example, on July 17, 2017, Kleyman received a wire for $168,106.43
into his attorney trust account from Investor A.  This money was an advanced fee to lease
a one million Euro bank draft.  Two days later, pursuant to Soto’s instructions, Kleyman
transferred $166,425.37 to an LLC controlled by Soto’s wife.  Kleyman transferred the
remaining $1,671 to his personal bank account.
40. In November 2017, after not receiving the financial instrument as promised,
Investor A contacted Kleyman, requesting a refund of his $168,106.43.  Investor A
provided Kleyman with an agreement bearing Kleyman’s signature.  According to the
agreement, Kleyman was supposed to confirm the arrival of the financial instrument and
refund Investor A’s money within four weeks if Investor A did not receive the instrument.

9
As Kleyman later learned, Hanson Group had affixed Kleyman’s signature to the
agreement without Kleyman’s knowledge or consent.
41. Kleyman did not repay Investor A.  Investor A never received the bank
instrument he had contracted for.
42. After the Investor A transaction, Soto never provided Kleyman with any
assurances that other investors were not similarly told that Kleyman guaranteed or
verified their transactions.  Kleyman never asked Soto to confirm that Hanson Group was
not providing the other investors with the same type of guarantee that Investor A had
received.
43. Despite the failure of the Investor A transaction and Hanson Group’s
forging of his signature on a document containing false guarantees, Kleyman continued
acting as paymaster for eight more Hanson Group transactions.
44. As another example, Investor B agreed to pay $75,000 to lease and
monetize a $10 million standby letter of credit.  Kleyman told Investor B’s representative
that Kleyman had been involved in 15 to 20 transactions with Hanson Group, and that no
one had ever lost any money.  This representation was false.  Kleyman had only been
paymaster for 7 transactions at that time, and he knew at least Investor A had lost money.
Kleyman also told the investor’s representative that he would hold the investor’s funds in
his attorney trust account until he received authorization to transfer the funds.  Kleyman
explained that the transfer would only be authorized once the bank had verified and
confirmed the standby letter of credit.

10
45. Kleyman’s representations caused Investor B and Investor B’s
representative to feel comfortable proceeding with the investment.  Investor B wired
$75,000 to Kleyman’s attorney trust account on July 15, 2019.
46. Contrary to his representation, Kleyman disbursed most of Investor B’s
funds about a week later, per Soto’s instructions.  Kleyman transferred $55 to his personal
account.  Kleyman did not obtain any evidence that Investor B received the promised
instrument or returns.
47. When Investor B did not receive the standby letter of credit, Investor B’s
representative contacted Kleyman to ask about the status of the transaction.  Kleyman
responded that he did not know the status of the transaction.
48. Several months later, Hanson Group notified Investor B that there had been
an issue with the due diligence performed by the “monetizing bank,” and demanded
another $925,000 fee.  Investor B’s representative called Kleyman several times, but
Kleyman never answered or returned the calls.  Investor B never received the standby
letter of credit or any funds from Hanson Group, and the $75,000 was never returned.
49. In all, Kleyman’s attorney trust account received over $1.2 million from
nine Hanson Group investors.  Kleyman disbursed most of those funds per Soto’s
directions, including over $615,000 to accounts controlled by Soto or Soto’s wife.
Kleyman disbursed $12,499.12 of the funds to his own account.
50. Investors felt comfortable investing with Hanson Group, in part, because
Kleyman, an attorney, was involved.  At least some investors understood that Kleyman

11
would not disburse their funds until and unless the contemplated transaction was
complete.
51. Kleyman knew or was at least reckless in not knowing that one reason that
Hanson investors felt comfortable investing in Hanson Group’s bank instruments was the
involvement of an attorney and an attorney trust account.
52. Given the red flags Kleyman encountered, including the facts discussed
above, Kleyman knew or was reckless in not knowing that Hanson Group would not
produce the financial instruments and financial returns that the investors paid for.
53. Kleyman used interstate emails, telephone calls, and wire transfers in
connection with the offer and sale of the bank instrument investments offered by Hanson
Group.
D. Kleyman’s Monetization Services
54.  Hanson Group’s website also advertised “monetization” services.  It stated
that “[t]he leased bank instruments are something that we do ourselves, and the
monetization we complete through an attorney-trustee office in the USA.”
55. On at least three occasions, Kleyman agreed to facilitate the monetization
of a financial instrument purportedly owned by one of Soto’s clients.  Kleyman agreed to
perform monetization services for these investors even though he had never monetized a
bank instrument before.
56. For example, in January 2020, Kleyman agreed to facilitate the
monetization of a leased $200 million standby letter of credit.
57. Kleyman was unable to monetize any of the bank instruments.

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E. Kleyman’s Continued Involvement in Prime Bank Schemes
58. Separate from his involvement in the Hanson Group transactions, Kleyman
has also been pursuing similar transactions through other entities.  Since at least 2015,
Kleyman, together with two associates, has been pursuing prime bank scheme
transactions through two entities for which Kleyman has held himself out as CEO and/or
general counsel (“Company A and Company B”).
59. For example, in October 2019, Company A unsuccessfully tried to
“facilitate the sale” of a €5 billion German bond from a Nigerian entity to a U.S.-based
LLC for €15 billion.  Company A agreed to place the bond into a “private asset purchase
program” to be managed by Company A, producing “tranches” of €200 million returns.
60. Based on his past conduct described above, unless Kleyman is restrained
and enjoined, he will engage in the transactions, practices, and courses of business set
forth in this Complaint and in transactions, practices, and courses of business of similar
type and object.
COUNT I
Violations of Section 10(b) of the Exchange Act,
and Exchange Act Rule 10b-5(a) and (c)
61. Paragraphs 1 through 60 are realleged and incorporated by reference.
62. Defendant, directly or indirectly, with scienter, by use of the means or
instrumentalities of interstate commerce, or of the mails, employed devices, schemes, or
artifices to defraud and engaged in acts, practices, or courses of business which have been
and are operating as a fraud or deceit upon the purchasers or sellers of securities.

13
63. Defendant knowingly or recklessly engaged in the conduct described
above.
64. By reason of the foregoing, Defendant violated Section 10(b) of the
Exchange Act”) [15 U.S.C. 78j(b)] and Exchange Act Rules 10b-5(a) and (c) [17 C.F.R
240.10b-5(a) and (c)].
COUNT II
Violations of Section 17(a)(1) and (3) of the Securities Act
65. Paragraphs 1 through 60 are realleged and incorporated by reference as
though fully set forth herein.
66. Defendant, directly or indirectly, with scienter, by use of the means or
instrumentalities of interstate commerce, or of the mails, has employed, is employing, or
is about to employ devices schemes or artifices to defraud and has engaged in
transactions, practices, or courses of business that operated or would operate as a fraud or
deceit upon the purchasers of such securities.
67. Defendant knowingly, recklessly, or negligently engaged in the conduct
described above.
68. By reason of the foregoing, Defendants have violated Section 17(a)(1) and
(3) of the Securities Act [15 U.S.C. § 77q(a)(1), (3)].
RELIEF REQUESTED
 WHEREFORE, the SEC respectfully requests that this Court:
I.
 Enter judgment in favor of the Commission finding that Kleyman violated the
federal securities laws and Commission rules as alleged in this Complaint.

14
II.
 Enter a Permanent Injunction restraining and enjoining Kleyman and those
persons in active concert or participation with Kleyman who receive actual notice of the
Order, by personal service or otherwise, and each of them from, directly or indirectly,
engaging in the transactions, acts, practices or courses of business described above, or in
conduct of similar purport and object, in violation of Section 17(a) of the Securities Act
[15 U.S.C. § 77q(a)], Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)], and Rule
10b-5 [17 C.F.R. § 240.10b-5] thereunder.
III.
 Enter a Permanent Injunction restraining and enjoining Kleyman and those
persons in active concert or participation with Kleyman who receive actual notice of the
Order, by personal service or otherwise, and each of them from, directly or indirectly
participating in, including acting as a paymaster in connection with, the issuance, offer,
or sale of any security, including but not limited to bank guarantees, medium term notes,
standby letters of credit, and similar instruments; provided, however, that this injunction
shall not prevent Defendant from purchasing or selling securities listed on a national
securities exchange for his own personal account.
IV.
Issue an Order requiring Kleyman to disgorge the ill-gotten gains received as a
result of, or benefits in any form derived from, the violations alleged in this Complaint,
including prejudgment interest thereon, pursuant to Sections 21(d)(5) and 21(d)(7) of the
Exchange Act  [15 U.S.C. §§ 78u(d)(5), and 78u(d)(7)].
V.

15
With regard to Kleyman’s violative acts, practices and courses of business set
forth herein, issue an Order imposing upon Kleyman appropriate civil penalties pursuant
to Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the
Exchange Act [15 U.S.C. § 78u(d)(3)].
VI.
 Retain jurisdiction of this action in accordance with the principals of equity and
the Federal Rules of Civil Procedure in order to implement and carry out the terms of all
orders and decrees that may be entered or to entertain any suitable application or motion
for additional relief within the jurisdiction of this Court.
VII.
 Grant such other relief as this Court deems appropriate.
JURY DEMAND
 Pursuant to Rule 38 of the Federal Rules of Civil Procedure, the Commission
hereby requests a trial by jury.

Date:  August 30, 2021                        Respectfully           submitted,

/s/ Ariella O. Guardi

Charles Kerstetter (PA Bar No. 67088)
Ariella O. Guardi (IL Bar No. 6296337)
Jonathan A. Epstein (IL Bar No. 6237031)
U.S. Securities and Exchange Commission
Chicago Regional Office
175 West Jackson Blvd, Suite 1450
Chicago, Illinois 60604
Telephone: (312) 353-7390
Fax: (312) 353-7398
[email protected]

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Attorneys for U.S. Securities and
Exchange Commission

Craig Baune (MN Bar No. 331272)
Assistant United States Attorney
District of Minnesota
600 U.S. Courthouse
300 South Fourth Street
Minneapolis, MN  55414
Telephone: (612) 664-5600
[email protected]
Local Counsel

UNITED STATES DISTRICT COURT 
FOR THE DISTRICT OF MINNESOTA 

_______________________________________ 
     : 

U.S. SECURITIES AND EXCHANGE  : 
COMMISSION,     : 
       :  CASE NO. 21-cv-1943 
 Plaintiff,     : 

     :     COMPLAINT 
 v.      : 
       :  
HOWARD S. KLEYMAN,    :  
       : 
 Defendant     : 
______________________________________ : 

COMPLAINT 

  Plaintiff United States Securities and Exchange Commission (the “Commission”) 

alleges as follows: 

NATURE OF THE ACTION 

1. From at least July 2017 through July 2019, Howard S. Kleyman 

(“Kleyman” or “Defendant”), who – at that time – was a lawyer licensed in Minnesota, 

participated in a “prime bank” scheme in which at least nine investors lost over $1.22 

million.   

2. Kleyman served as a “paymaster” in at least nine transactions in which 

investors paid advanced fees to his attorney trust accounts, ostensibly to purchase, lease, 

and/or monetize purported bank instruments such as standby letters of credit or bank 

guarantees from The Hanson Group of Companies S.A. (“Hanson Group”).  In fact, these 

were fictional “prime bank” investments. 

3. Prime bank instruments and trading programs such as those for which 

CASE 0:21-cv-01943   Doc. 1   Filed 08/30/21   Page 1 of 16



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Kleyman served as paymaster are fictitious.  The Commission, the FBI, the Federal 

Reserve Bank, the International Monetary Fund, and other federal and international 

authorities have publicly denounced these bank instrument program frauds in easily 

obtainable public information. 

4. Kleyman knew or was reckless in not knowing that investors were relying 

on Kleyman, an attorney, to keep their funds safe and to disburse funds only upon 

successful completion of the transactions.  Instead, Kleyman blindly disbursed the funds, 

without conducting any inquiry into whether the investors had received their promised 

instruments or funding. 

5. Kleyman had no basis to believe that the purported bank instruments 

existed, or that they had any value.  In fact, Kleyman learned of many red flags 

suggesting that these transactions were fraudulent.   

6. Kleyman collected $12,499.12 in fees for the nine transactions for which he 

served as paymaster.  These fees were paid from the defrauded investors’ funds. 

7. Despite the serial failure of these prime bank investments, complaints from 

investors, and the lack of any evidence that these transactions had been or could be 

completed successfully, Kleyman continued his involvement in prime bank schemes.  In 

fact, even after he stopped acting as a paymaster, Kleyman participated in prime bank 

transactions in other ways. 

8. Through the foregoing conduct and as alleged further below, Kleyman 

engaged in transactions, acts, practices, and courses of business that violated Section 

17(a)(1) and (3) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. 77q(a)(1) and 

CASE 0:21-cv-01943   Doc. 1   Filed 08/30/21   Page 2 of 16



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(3)], Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. 

78j(b)] and Exchange Act Rules 10b-5(a) and (c) [17 C.F.R 240.10b-5(a) and (c)]. 

9. The Commission brings this action to put a stop to Kleyman’s violations of 

the federal securities laws, to prevent further harm to investors, and to seek disgorgement 

and civil penalties from Kleyman stemming from his violations of the securities laws.     

JURISDICTION AND VENUE 
 

10. The Commission brings this action under Section 20(b) of the Securities 

Act [15 U.S.C. §77t(b)] and Sections 21(d) and 21(e) of the Exchange Act [15 U.S.C. 

§§78u(d) and 78u(e)].   

11. This Court has jurisdiction over this action under Section 22 of the 

Securities Act [15 U.S.C. § 77v] and Section 27 of the Exchange Act [15 U.S.C. § 78aa]. 

12. Venue is proper in this Court under Section 27 of the Exchange Act [15 

U.S.C. § 78aa].  Many of the acts, practices, and courses of business constituting 

violations alleged herein have occurred within the jurisdiction of the United States 

District Court for the District of Minnesota. 

13. Kleyman resides and conducts business within the District of Minnesota. 

14. Kleyman directly and indirectly made use of the means and 

instrumentalities of interstate commerce and of the mails in connection with the acts, 

practices, and courses of business alleged herein, and will continue to do so unless 

enjoined. 

DEFENDANT AND RELATED PARTIES 

15. Howard S. Kleyman, age 79, is a resident of St. Paul, Minnesota.  Until 

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 4 

his recent disbarment by the Minnesota Supreme Court, Kleyman was an attorney 

licensed to practice in Minnesota.  See In re Petition for Disciplinary Action against 

Howard S. Kleyman, A20-1304 (Minn. Sup. Ct. June 9, 2021). 

16. The Hanson Group of Companies S.A. (“Hanson Group”) is 

Panamanian company purporting to sell, lease, and monetize bank instruments to 

investors through the internet and brokers. 

17. Harold Soto Boigues aka Harold Soto (“Soto”), age 41, is a citizen of the 

Dominican Republic.  His current residence is unknown.  He is the CEO of Hanson 

Group.   

FACTS 

A. Kleyman’s Previous Involvement with Soto and Prime Bank Schemes 
 

18. The nine transactions for which he acted as paymaster for Hanson Group 

were not Kleyman’s first foray into prime bank schemes.  In fact, Kleyman had been 

pursuing prime bank instrument transactions for about four years before he began acting 

as paymaster for Hanson Group.  Every transaction he attempted failed. 

19. Beginning in approximately 2013, Kleyman, together with an associate, 

pursued a series of transactions, seeking to obtain financing using bank instruments such 

as bank guarantees and standby letters of credit.  All of those transactions failed.   

20. In 2015, Kleyman attempted another transaction, this time with a group that 

included Soto and Hanson Group, as well as James Louks and FiberPoP UK Ltd. 

(“FiberPoP UK”).  FiberPoP UK – a company with no assets or operations – purportedly 

issued several €500 million bonds, which it planned to use to secure hundreds of millions 

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 5 

of Euros in bank guarantees, which would fund trading programs and generate enormous 

returns.  Hanson Group, through Soto, facilitated this purported transaction.  Ultimately, 

the transaction failed.  FiberPoP UK investors in the United States lost at least $250,000, 

some of which flowed through Kleyman’s accounts.   

21. On September 1, 2015, the Commission brought fraud charges against 

Louks and his company, FiberPoP Solutions, Inc.  The complaint accused Louks and 

FiberPoP of funneling investor funds into a series of prime bank schemes, including the 

scheme described above.  See SEC v. Louks et al., 15-cv-3456 (D. Minn.).  The 

Commission obtained a Final Judgment against the defendants on January 13, 2017.  Id. 

(DE 97).  

22. In connection with the Louks matter, the Commission deposed Kleyman in 

October 2015.  Commission staff showed Kleyman a warning notice from the FBI about 

common fraud schemes.  The FBI warned of “Letter of Credit Fraud” and “Prime Bank 

Note Fraud,” otherwise known as a prime bank scheme, where fraud artists offer letters of 

credit or bank guarantees as an investment, and claim to generate extremely high returns.  

In this notice, the FBI warned that investments in letters of credit “simply do not exist,” 

and that “bank guarantees are never traded or sold by any kind of market.” 

23. After the failed FiberPoP UK transaction, but before Kleyman provided any 

paymaster services to Hanson Group, Kleyman participated yet another scheme with 

Soto.  Soto gave Kleyman a debit or credit card in a third party’s name and instructed 

Kleyman to charge thousands of dollars to the card using a beauty salon that Kleyman 

owned.  Kleyman then disbursed those funds to Soto and another associate.  The card 

CASE 0:21-cv-01943   Doc. 1   Filed 08/30/21   Page 5 of 16



 6 

processor eventually reclaimed $17,000 from Kleyman’s salon, threatening his business, 

and causing Kleyman to question whether the card was stolen or the transaction was 

otherwise fraudulent. 

24. Despite the serial failure of these schemes, the Commission’s Louks 

lawsuit, the FBI warning, and the dubious credit card scheme, Kleyman agreed to act as 

paymaster for Soto and Hanson Group. 

B. Hanson Group’s Prime Bank Scheme Offerings 

25. Hanson Group offered to sell and lease bank instruments such as standby 

letters of credit, bank guarantees, bank drafts, and medium term notes through its public 

website and brokers.  Investors were required to pay a deposit of between €75,000 and 

€500,000, depending on the size of the financial instrument.     

26. Hanson Group also offered to “monetize” these bank instruments, meaning 

it offered to use bank instruments produce enormous returns for investors.   

27. Hanson Group’s promises of financial instruments and monetization were a 

ruse.  Investors did not receive the instruments or the financial returns they were 

promised.   

28. The investments offered by Hanson Group bore many of the indicia of 

prime bank schemes the FBI warns about in the notice described above.  For example, 

Hanson Group required investors to enter into strict non-disclosure agreements, offered 

returns in “a year and a day,” and touted instruments from the “top hundred [aka prime] 

banks.”  The instruments Hanson Group offered – standby letters of credit and bank 

guarantees – are typical of prime bank schemes.   

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29. On its public website, Hanson Group claimed that it only earned funds if 

the investor received his or her desired funding.  It also claimed that investors’ initial 

deposit was 100% protected.  These statements were false.  As explained below, 

Kleyman disbursed investors’ fees to Soto or at Soto’s direction just days after they 

tendered payment, without determining that the transactions succeeded. 

30. On its website, Hanson Group also touted the involvement of its “attorney’s 

office client trust account” as one of three levels of “protection” afforded to its investors.   

C. Kleyman’s Paymaster Services  

31. From approximately January 2016 through July 2019, Kleyman served as 

paymaster for Hanson Group.   

32. Kleyman conducted no due diligence on or vetting of Soto before or during 

his time as paymaster for Hanson Group.  The only due diligence Kleyman performed on 

Hanson Group itself was a brief review of the landing page of the Hanson Group website. 

33. Kleyman operated under an agreement with Hanson Group dated January 

11, 2016 which set the terms of Kleyman’s duties as paymaster (the “Paymaster 

Agreement”).  Among other things, the Paymaster Agreement stated that “[f]or the 

avoidance of doubt, Payments shall only be made to the Beneficiaries if a relevant 

Transaction has successfully been concluded.”   

34. As paymaster, Kleyman accepted investors’ funds into his attorney trust 

account.  Then, upon receiving instructions from Soto, Kleyman disbursed the investors’ 

funds to Soto, Soto’s wife, and others.  Kleyman typically disbursed the funds within 

several days of receipt.   

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35. Before disbursing funds, Kleyman did not perform any inquiry to determine 

whether the investors had received their requested bank instruments.  In fact, Kleyman 

never saw any evidence that Soto had ever provided a Hanson Group investor with a 

bank instrument that had any value.   

36. For his paymaster service, Kleyman was to receive a fee equal to one 

percent of the funds deposited into his account. 

37. Under at least three of the agreements between Hanson Group and 

investors, which Kleyman reviewed, Kleyman himself was supposed to send the bank 

instruments to the investors.  However, Kleyman never sent any bank instruments to any 

investors.  

38. Kleyman performed paymaster services for at least nine transactions 

between July 2017 and July 2019.   

39. For example, on July 17, 2017, Kleyman received a wire for $168,106.43 

into his attorney trust account from Investor A.  This money was an advanced fee to lease 

a one million Euro bank draft.  Two days later, pursuant to Soto’s instructions, Kleyman 

transferred $166,425.37 to an LLC controlled by Soto’s wife.  Kleyman transferred the 

remaining $1,671 to his personal bank account. 

40. In November 2017, after not receiving the financial instrument as promised, 

Investor A contacted Kleyman, requesting a refund of his $168,106.43.  Investor A 

provided Kleyman with an agreement bearing Kleyman’s signature.  According to the 

agreement, Kleyman was supposed to confirm the arrival of the financial instrument and 

refund Investor A’s money within four weeks if Investor A did not receive the instrument.  

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As Kleyman later learned, Hanson Group had affixed Kleyman’s signature to the 

agreement without Kleyman’s knowledge or consent.  

41. Kleyman did not repay Investor A.  Investor A never received the bank 

instrument he had contracted for. 

42. After the Investor A transaction, Soto never provided Kleyman with any 

assurances that other investors were not similarly told that Kleyman guaranteed or 

verified their transactions.  Kleyman never asked Soto to confirm that Hanson Group was 

not providing the other investors with the same type of guarantee that Investor A had 

received.   

43. Despite the failure of the Investor A transaction and Hanson Group’s 

forging of his signature on a document containing false guarantees, Kleyman continued 

acting as paymaster for eight more Hanson Group transactions.  

44. As another example, Investor B agreed to pay $75,000 to lease and 

monetize a $10 million standby letter of credit.  Kleyman told Investor B’s representative 

that Kleyman had been involved in 15 to 20 transactions with Hanson Group, and that no 

one had ever lost any money.  This representation was false.  Kleyman had only been 

paymaster for 7 transactions at that time, and he knew at least Investor A had lost money.  

Kleyman also told the investor’s representative that he would hold the investor’s funds in 

his attorney trust account until he received authorization to transfer the funds.  Kleyman 

explained that the transfer would only be authorized once the bank had verified and 

confirmed the standby letter of credit.   

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45. Kleyman’s representations caused Investor B and Investor B’s 

representative to feel comfortable proceeding with the investment.  Investor B wired 

$75,000 to Kleyman’s attorney trust account on July 15, 2019.   

46. Contrary to his representation, Kleyman disbursed most of Investor B’s 

funds about a week later, per Soto’s instructions.  Kleyman transferred $55 to his personal 

account.  Kleyman did not obtain any evidence that Investor B received the promised 

instrument or returns. 

47. When Investor B did not receive the standby letter of credit, Investor B’s 

representative contacted Kleyman to ask about the status of the transaction.  Kleyman 

responded that he did not know the status of the transaction.   

48. Several months later, Hanson Group notified Investor B that there had been 

an issue with the due diligence performed by the “monetizing bank,” and demanded 

another $925,000 fee.  Investor B’s representative called Kleyman several times, but 

Kleyman never answered or returned the calls.  Investor B never received the standby 

letter of credit or any funds from Hanson Group, and the $75,000 was never returned.    

49. In all, Kleyman’s attorney trust account received over $1.2 million from 

nine Hanson Group investors.  Kleyman disbursed most of those funds per Soto’s 

directions, including over $615,000 to accounts controlled by Soto or Soto’s wife.  

Kleyman disbursed $12,499.12 of the funds to his own account.   

50. Investors felt comfortable investing with Hanson Group, in part, because 

Kleyman, an attorney, was involved.  At least some investors understood that Kleyman 

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would not disburse their funds until and unless the contemplated transaction was 

complete. 

51. Kleyman knew or was at least reckless in not knowing that one reason that 

Hanson investors felt comfortable investing in Hanson Group’s bank instruments was the 

involvement of an attorney and an attorney trust account. 

52. Given the red flags Kleyman encountered, including the facts discussed 

above, Kleyman knew or was reckless in not knowing that Hanson Group would not 

produce the financial instruments and financial returns that the investors paid for.   

53. Kleyman used interstate emails, telephone calls, and wire transfers in 

connection with the offer and sale of the bank instrument investments offered by Hanson 

Group. 

D. Kleyman’s Monetization Services 

54.  Hanson Group’s website also advertised “monetization” services.  It stated 

that “[t]he leased bank instruments are something that we do ourselves, and the 

monetization we complete through an attorney-trustee office in the USA.” 

55. On at least three occasions, Kleyman agreed to facilitate the monetization 

of a financial instrument purportedly owned by one of Soto’s clients.  Kleyman agreed to 

perform monetization services for these investors even though he had never monetized a 

bank instrument before. 

56. For example, in January 2020, Kleyman agreed to facilitate the 

monetization of a leased $200 million standby letter of credit.   

57. Kleyman was unable to monetize any of the bank instruments.   

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E. Kleyman’s Continued Involvement in Prime Bank Schemes 

58. Separate from his involvement in the Hanson Group transactions, Kleyman 

has also been pursuing similar transactions through other entities.  Since at least 2015, 

Kleyman, together with two associates, has been pursuing prime bank scheme 

transactions through two entities for which Kleyman has held himself out as CEO and/or 

general counsel (“Company A and Company B”).  

59. For example, in October 2019, Company A unsuccessfully tried to 

“facilitate the sale” of a €5 billion German bond from a Nigerian entity to a U.S.-based 

LLC for €15 billion.  Company A agreed to place the bond into a “private asset purchase 

program” to be managed by Company A, producing “tranches” of €200 million returns. 

60. Based on his past conduct described above, unless Kleyman is restrained 

and enjoined, he will engage in the transactions, practices, and courses of business set 

forth in this Complaint and in transactions, practices, and courses of business of similar 

type and object.  

COUNT I 

Violations of Section 10(b) of the Exchange Act, 
and Exchange Act Rule 10b-5(a) and (c) 

61. Paragraphs 1 through 60 are realleged and incorporated by reference. 

62. Defendant, directly or indirectly, with scienter, by use of the means or 

instrumentalities of interstate commerce, or of the mails, employed devices, schemes, or 

artifices to defraud and engaged in acts, practices, or courses of business which have been 

and are operating as a fraud or deceit upon the purchasers or sellers of securities. 

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63. Defendant knowingly or recklessly engaged in the conduct described 

above. 

64. By reason of the foregoing, Defendant violated Section 10(b) of the 

Exchange Act”) [15 U.S.C. 78j(b)] and Exchange Act Rules 10b-5(a) and (c) [17 C.F.R 

240.10b-5(a) and (c)]. 
COUNT II 

Violations of Section 17(a)(1) and (3) of the Securities Act 

65. Paragraphs 1 through 60 are realleged and incorporated by reference as 

though fully set forth herein. 

66. Defendant, directly or indirectly, with scienter, by use of the means or 

instrumentalities of interstate commerce, or of the mails, has employed, is employing, or 

is about to employ devices schemes or artifices to defraud and has engaged in 

transactions, practices, or courses of business that operated or would operate as a fraud or 

deceit upon the purchasers of such securities.  

67. Defendant knowingly, recklessly, or negligently engaged in the conduct 

described above. 

68. By reason of the foregoing, Defendants have violated Section 17(a)(1) and 

(3) of the Securities Act [15 U.S.C. § 77q(a)(1), (3)]. 

RELIEF REQUESTED 

 WHEREFORE, the SEC respectfully requests that this Court: 

I.  

 Enter judgment in favor of the Commission finding that Kleyman violated the 

federal securities laws and Commission rules as alleged in this Complaint. 

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II.  

 Enter a Permanent Injunction restraining and enjoining Kleyman and those 

persons in active concert or participation with Kleyman who receive actual notice of the 

Order, by personal service or otherwise, and each of them from, directly or indirectly, 

engaging in the transactions, acts, practices or courses of business described above, or in 

conduct of similar purport and object, in violation of Section 17(a) of the Securities Act 

[15 U.S.C. § 77q(a)], Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)], and Rule 

10b-5 [17 C.F.R. § 240.10b-5] thereunder.   

III. 

 Enter a Permanent Injunction restraining and enjoining Kleyman and those 

persons in active concert or participation with Kleyman who receive actual notice of the 

Order, by personal service or otherwise, and each of them from, directly or indirectly 

participating in, including acting as a paymaster in connection with, the issuance, offer, 

or sale of any security, including but not limited to bank guarantees, medium term notes, 

standby letters of credit, and similar instruments; provided, however, that this injunction 

shall not prevent Defendant from purchasing or selling securities listed on a national 

securities exchange for his own personal account.   

IV. 

Issue an Order requiring Kleyman to disgorge the ill-gotten gains received as a 

result of, or benefits in any form derived from, the violations alleged in this Complaint, 

including prejudgment interest thereon, pursuant to Sections 21(d)(5) and 21(d)(7) of the 

Exchange Act  [15 U.S.C. §§ 78u(d)(5), and 78u(d)(7)]. 

V. 

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With regard to Kleyman’s violative acts, practices and courses of business set 

forth herein, issue an Order imposing upon Kleyman appropriate civil penalties pursuant 

to Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the 

Exchange Act [15 U.S.C. § 78u(d)(3)].  

VI. 

 Retain jurisdiction of this action in accordance with the principals of equity and 

the Federal Rules of Civil Procedure in order to implement and carry out the terms of all 

orders and decrees that may be entered or to entertain any suitable application or motion 

for additional relief within the jurisdiction of this Court. 

VII. 

 Grant such other relief as this Court deems appropriate. 

JURY DEMAND 

 Pursuant to Rule 38 of the Federal Rules of Civil Procedure, the Commission 

hereby requests a trial by jury. 

 
 
Date:  August 30, 2021    Respectfully submitted, 

 
 

/s/ Ariella O. Guardi 

 
 
 

Charles Kerstetter (PA Bar No. 67088) 
Ariella O. Guardi (IL Bar No. 6296337) 
Jonathan A. Epstein (IL Bar No. 6237031) 
U.S. Securities and Exchange Commission 
Chicago Regional Office  
175 West Jackson Blvd, Suite 1450 
Chicago, Illinois 60604 
Telephone: (312) 353-7390 
Fax: (312) 353-7398 
[email protected] 

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Attorneys for U.S. Securities and 
Exchange Commission 
 
Craig Baune (MN Bar No. 331272) 
Assistant United States Attorney 
District of Minnesota 
600 U.S. Courthouse 
300 South Fourth Street 
Minneapolis, MN  55414 
Telephone: (612) 664-5600 
[email protected] 
Local Counsel 
 

 

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