Genadi Yagodayev, the former head of the Rockford Group, pleaded guilty in federal court in Brooklyn, New York, to conspiracy to commit mail and wire fraud, six months after being extradited from Cyprus.
The Securities & Exchange Commission shut down the Rockford Group on Dec. 8, 2009, stating that it had “halted a Ponzi scheme involving a New York firm that solicited investments involving personal injury lawsuit settlements but instead shipped the money overseas. The SEC obtained a court order freezing the assets of the firm, its president, and several companies holding money from the scam that began several months ago.”
An SEC statement said:
“The SEC alleges that Rockford Funding Group LLC used cold calling and a Web site to raise at least $11 million from more than 200 investors in 41 different states and Canada since March 2009. Rockford Group falsely touted itself as a leading private equity firm with an $800 million pipeline of investments and many Fortune 500 companies as clients, and told investors their money would be safely invested in structured settlements in private lawsuits.
“According to the SEC’s complaint, filed in U.S. District Court for the Southern District of New York, Rockford Group does not appear to engage in any investment activity that would generate any returns for investors, let alone its claimed returns of at least 15 percent annually. Instead, dividend payments made to investors have been funded by other investors’ contributions, and Rockford Group transferred most of the money collected from investors to banks in Latvia and Hong Kong.”
Read the full SEC statement here.
The SEC’s complaint against Yagodayev and the Rockford Group is available here.
(Additional reporting and editing by Lawrence Aragon for Buyouts)