Consumer Affairs' Bureau of Securities Wins $36.4 Million Judgment
Against Operators of Ponzi Scheme That Defrauded Investors
NEWARK – A State Superior Court Judge has issued a judgment that orders the
perpetrators of a Ponzi scheme to pay $29.8 million for the benefit of defrauded
investors and an additional $6.5 million in civil penalties to the New Jersey Bureau of
Securities.
Judge David B. Katz in Newark rendered a decision in favor of the Bureau of Securities,
granting its Motion for Summary Judgment and Final Judgment by Default filed by
Deputy Attorneys General with the Division of Law, thus concluding the lawsuit as to
Carr Miller Capital, LLC and three of its principals including the company's president,
Everett Charles Ford Miller. The company was based in Marlton prior to the Bureau and
the Attorney General filing a lawsuit and obtaining a Court order in December 2010 to
freeze Miller's assets and place a receiver in charge of his related companies.
Investors allegedly were told that the money would be used for Metropolitan Ambulatory
Surgical Center, LLC and George J. Bussanich's other companies. Contrary to its
name, Metropolitan Ambulatory Surgical Center, LLC, which has a Cliffside Park
business address, is not a surgical center but rather a holding company controlled by
George J. Bussanich. The investors purchased notes which carried a 6% to 8% annual
rate of return.
Carr Miller Capital offered unregistered nine-month notes that purportedly provided
rates of return of up to 20% annually. Certain investors were told they could renew the
notes for additional nine-month terms or be paid out at the end of the term. Funds sent
to investors as "interest" payments were, in fact, merely new investors' capital being
used to keep the Ponzi scheme in operation.
The defendants who are jointly responsible for paying the $29.8 million in restitution,
which represents the losses suffered by investors who fell victim to the Ponzi scheme,
plus individual civil penalties as noted below, are:
Carr Miller Capital, LLC, $2.34 million;
Everett Charles Ford Miller, 43, former President of Carr Miller Capital, $1.87
million;
John Paul Fish, 39, former Vice President of Carr Miller Capital, $1.18 million;
and
Ryan Jude Carr, 37, former Vice President of Carr Miller Capital, $1.18 million.
The receiver currently is identifying assets that will be liquidated and used to pay
investors.
"Ponzi schemes continue to be perpetrated against investors and this case should be
taken as a cautionary tale by consumers and also would-be fraudsters," Acting Attorney
General John J. Hoffman said. "Those who think they can defraud investors and enrich
themselves will find out how wrong they are, as these three did."
Judge Katz found that over 8,800 violations of the state's Uniform Securities Law were
committed, based on the investigation conducted by Bureau of Securities Supervising
Investigator Arlene Ferris-Waks and Investigator Rosemary Gonzalez and the
prosecution led by DAsG Victoria A. Manning, Emanuel S. Asmar, Paul E. Minnefor,
and Stacy-Ann T. Davy of the Securities Fraud Prosecution Section in the Division of
Law. The Bureau and the Division of Law were assisted by the Arkansas Securities
Department, the Texas State Securities Board, the U.S. Attorneys' Office, and Captain
Richard Osieja of the Mountainside, N.J., Police Dept., among other law enforcement
agencies.
"This multi-agency investigation underscores how law enforcement agencies and
securities regulators continue to focus on securities and investment fraud in the post-
Madoff era," said Eric T. Kanefsky, Director of the State Division of Consumer Affairs.
"We remain committed to getting money back into the hands of those who were
defrauded."
The Bureau's investigation also revealed that over $13.5 million of investors' monies
were used to pay for personal expenses, including meals, entertainment, and travel,
automobile purchases, a New Jersey Devils sky box at the Prudential Center in Newark,
Carr Miller broker commissions, transfers to Carr Miller insiders and their family
members, and payroll, among other things. Over an additional $22 million was put into
various hedge funds, real estate, film production companies, a seasonal waterfront
restaurant in Philadelphia, mortgage banks, and an oil and gas venture, among other
high-risk ventures, which incurred significant losses and were not authorized by or
disclosed to most investors.
"Promised high rates of return must be viewed with extreme caution in today's lowinterest
rate environment," said Amy G. Kopleton, Acting Chief of the Bureau of
Securities. "In this matter, we had unregistered investments being sold, which is a red
flag that requires potential investors to perform due diligence before investing."
The Bureau of Securities can assist investors in determining whether those selling securities, as well as securities offered for sale, are registered or are exempt from registration. The Bureau can be contacted toll-free within New Jersey at
1-866-I-INVEST (1-866-446-8378) or from outside New Jersey at
973-504-3600. The Bureau's website is
www.njcsecurities.gov.
Follow the Division of Consumer Affairs on
Facebook, and check our online calendar of upcoming
Consumer Outreach events.
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