Federal regulators accuse two Texas companies and their leaders with defrauding elderly investors in a Ponzi scheme.
The Securities and Exchange Commission said Monday that it charged Clifton E. Stanley, 66, of Galveston, Texas; The Lifepay Group; Michael E. Watts, 62, of Sugar Land, Texas; and SMDRE LLC with violating securities-registration and antifraud laws.
The SEC says from 2010 to 2017 Stanley lured at least 30 elderly victims in Texas and Louisiana to invest about $2.4 million in Lifepay by touting high returns. The commission says he paid early investors with money from new ones.
The SEC's complaint filed in federal district court in Houston also says that starting in 2015 Stanley and Watts convinced mostly elderly people to invest about $1.4 million in SMDRE.
