BREAKING NEWS ALERT Saturday 5/3/08
Californian man accused of investment scam targeting Christians
Federal authorities arrested a California Advisor who is accused of scamming $25 million from mostly Christian investors. The advisor’s alleged investment scheme consisted of
Jon G. Ervin, 61, of Mission Viejo, was arrested Friday on a charge of wire fraud. He later appeared in federal court, where he was ordered held on $1 million bail. Ervin was named Thursday in a criminal complaint filed in federal court. The same day, the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission filed lawsuits against Ervin and his company, Safevest LLC, and obtained federal orders freezing their assets.
According to the criminal complaint, Ervin used Safevest to persuade victims to invest in a fake commodity futures trading program. Investors were told Safevest would use no more than 13 percent of their deposit in hundreds of commodity trades a day on the Chicago Mercantile Exchange, with a guarantee of up to 1 percent in returns each day. Investors could check their returns on a password-protected Web site that was run exclusively by Ervin. The program attracted about 550 investors, officials said.
Authorities allege that Ervin didn’t invest any of the money in commodities trading and instead spent $1 million to invest in a Georgia golf course. He also bought a sport utility vehicle and spent lavishly on air travel, gourmet meals and shopping, said Thom Mrozek, spokesman for the U.S. attorney’s office.
Up to 80 percent of investors were churchgoing Christians and many joined the program after being approached by fellow worshippers through a referral system, according to court papers. Those who referred others in their church would receive a 10 percent “referral fee” from the profits of the new members they solicited; pastors were required to make an initial investment of $5,000, while non-pastors had to put down $25,000, according to federal documents.
Always be cautious when investing with any advisor. Make sure to do your homework. Check with the NASD (www.nasd.com) and always use common sense. Whenever there is a guarantee that sounds too good to be true (up to 1% per day) and a high referral fee (10 percent) something is not adding up. Also make sure you clearly understand the investments you are involved in. Commodities are a very complicated investment and only suitable for a limited number of investors. It always breaks my heart when I see individuals being taken advantage of by the small amount of unhonest professionals in the investment industry.