May 13, 2010

Another securities broker stands accused of running a Ponzi scheme, this time in Michigan, where Attorney General Mike Cox says investors were fleeced of $2 million.

Scott Pionk, 42, of Clinton Township, formerly employed as a securities broker with Michigan Securities, Inc., is accused of using fraudulent practices to sell unregistered securities not related to his employment.

Between 2003 and April 2010, Pionk sold $2,088,960 of Select Financial Securities to at least 14 different investors. He allegedly told the investors that Select Financial Securities were backed by government owned or leased buildings, which would pay approximately seven or eight percent and were very low risk.

However, Cox says Select Financial Securities were not registered with the Office of Financial and Insurance Regulation and none of the money was used to purchase any other legitimate security. Several of the victims were senior citizens.

"During these difficult economic times, there are individuals who are preying on their fellow citizens and trying to make a fast buck at the expense of others," said Cox. "Financial scams are devastating to the honest, hardworking victims, and my office will not tolerate it."

The complaint alleges that Pionk pocketed the money he received from the investments by writing checks out to himself and withdrawing money from ATM machines in casinos. He stands charged with nine felony counts of selling unregistered securities, nine felony counts of selling nonexistent securities and converting the money to his own use, and other charges.