June 21, 2012
--- Gary
J. Martel, of Chelsea, Massachusetts, was charged by the Securities and Exchange Commission (SEC) with defrauding investors of $1.6
million. His assets were also frozen. ---
The
complaint, filed in federal district court on June 19, alleges that from at least
2006 to the present, Martel—who conducted business under multiple names
including Martel Financial Group and MFG Funding—defrauded at least 12
investors in Massachusetts, Vermont and Florida of no less than $1.6 million, and
likely obtained significantly more from other investors. Today, with Martel’s
consent, a federal judge entered an order freezing Martel’s assets and
prohibiting him from continuing to violate the anti-fraud provisions of the
federal securities laws.
Martel
told investors—many of them retirees looking for a safe investment to generate
reliable income—that he would place their money in “pass-through bonds” or
other purported fixed-income or pooled-investment products. He assured clients
the investments were safe, according to the charges.
Martel
created account statements showing interest earned and sometimes made small
distributions of supposed interest, which encouraged investors to give him more
money to invest, the complaint alleged. It also stated that offered other fraudulent
investments.