The Securities and Exchange Commission announced Thursday that it has sued a Raleigh-area woman and her business partner for their roles in a scheme that allegedly swindled African-American churchgoers out of $11 million.
Thursday, April 12, 2012
Wendy Jean Connor, 43, was the chief operating officer of City Capital Corp., which was led by 29-year-old "Social Capitalist" Ephren W. Taylor, II and was determined to be a Ponzi scheme, according to the SEC's complaint.
Taylor touted himself as the youngest black CEO of a public company and appeared on numerous television shows and in the media.
His company sold promissory notes pledging a 12 percent to 20 percent return, telling investors the money would be used to fund small businesses like laundromats, juice bars, gas stations and sweepstakes parlors. He traveled around to churches promoting his investments as a way to give back the community and make a healthy return.
Instead, Taylor used the majority of the money to publish and promote his books, hire consultants and fund his wife's singing career, the SEC says.
“Ephren Taylor professed to be in the business of socially-conscious investing. Instead, he was in the business of promoting Ephren Taylor,” David Woodcock, director of the SEC’s Fort Worth Regional Office, said in a statement.
“He preyed upon investors’ faith and their desire to help others, convincing them that they could earn healthy returns while also helping their communities.”
The company never generated any profits, instead relying on new investors to pay back old ones, the SEC found.
Connor began running the company's daily operations in early 2009. It shut down in late 2010.
Posted by Andrew Dunn at 4:36 PM