SEC v. A.L. Waters Capital, LLC, et al., Case No. 12-cv-10783-DJC (D. Mass.); U.S. v. Arnett L. Waters, 12-cr-10336-DJC (D. Mass.). On May 1, 2012, the SEC filed charges against Arnett Waters and two of his companies for their roles in fraudulent investment partnerships. After filing its case, the SEC obtained a preliminary injunction and asset freeze. In August, 2012, the SEC filed a contempt motion alleging that Waters violated the preliminary injunction by transferring frozen funds to an undisclosed bank account. On October 17, 2012, the United States Attorney’s Office charged Waters with schemes to defraud investors and business clients. Waters used fictitious partnerships to draw in investors, misappropriate their investment money, and spend the vast majority of it on personal and business expenses and debts. Waters raised $839,000, including $500,000 from his church. Waters also defrauded clients of his rare coins business out of as much as $7.8 million by selling coins at inflated prices and by getting coin purchasers to return coins to him, on the false representation that he would sell those coins on their behalf. In reality, however, he sold most or all of the coins and kept the money for himself. Finally, Waters is charged with lying to the SEC in connection with its investigation.
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