SEC files enforcement action against Long Island fraudster

LOSSES & LAWSUITS

According to the SEC complaint, Dawson targeted pensioners living on Long Island, New York and advised them to surrender existing variable annuity policies, to mortgage their residences and to transfer the proceeds to his companies. Dawson is accused of fraudulently promising clients they would earn a 12–15% return on their investments, while he would also arrange to pay their mortgages or to pay monthly returns on the investments. Rather than proceeding with the investments as promised, Dawson is alleged to have withdrawn more than $100,000 for his own use. He also failed to make any mortgage payments, which eventually became known to the investors and the authorities.

The SEC has charged Dawson and his associates with making fraudulent solicitations and misappropriating investor funds. This action follows the SEC's July 2006 initiative, Seniors Summit, which aims to examine the best ways to protect senior citizens from fraud.