SEC Charges Phony Western Gold Sales Team in $300 Million Ponzi Case

Sorenson allegedly hosted tours by potential investors at his Honduran refinery and demonstrated the pouring of gold bars while making false claims about the profitability of his company. Brost and Sorenson concealed their ownership and control of SGD by using personal aliases, corporate entities and trust agreements with nominee shareholders. Brost and his sales team, calling themselves "Structurists," sold investors shares in shell companies and then put their money through a "structuring" process that culminated with the transfer of funds from Syndicated Gold Depository to Merendon Mining.

"Unbeknownst to investors, they were actually investing in shell companies owned or controlled by Brost or Sorenson," according to the SEC's injunctive action taken in U.S. District Court for the Western District of Washington. "Investor funds were often transferred multiple times through numerous bank accounts held as far away as Asia, Europe and South America, and then ultimately used to make 'interest payments' to investors, fund the few unprofitable companies that actually had operations, and personally enrich Brost, Sorenson and others involved in the scheme."

Brost and Sorenson apparently spent millions of dollars to buy and renovate extravagant homes, ranches, and recreational vehicles. Sorenson also purchased and outfitted a luxury fishing resort in South America. His wife and daughter are named as relief defendants in the case in order to recover investor assets now in their possession.

Read a story about the Kenneth Starr Ponzi scheme from the archives of InvestmentAdvisor.com.