NAPLES, Fla. — When Chris Vernon heard about the allegation against Naples-based venture capitalist Brent Seaman, he immediately saw some major red flags.
Seaman was charged last week by the U.S. Securities and Exchange Commission with running a $35 million Ponzi scheme.
According to federal regulators, there were around 60 victims, many of them retired or elderly, who were members of the same church as Seaman.
Vernon calls those kinds of personal connections, “affinity fraud.”
“Where you have some kind of connection to the person who is trying to pitch you something. Maybe you were in the Marines together, go to the same church, you’re Rotarians together. Anything like that, causes you to bring your guard down. That’s what people are looking for to try to take advantage of you,” said Vernon, a Naples-based attorney who works with investors.
The SEC’s complaint against Seaman claims that from June 2019 to September 2022 he told various investors that he would use their money to invest in technology companies.
He also promised major guaranteed annual returns, according to federal regulators.
“Most high-risk stuff is very volatile, but if they say they can get you above-market returns and I’m guaranteeing you. That’s a huge red flag,” Vernon said.
The complaint further alleges that Seaman claimed he was successful in investing in currencies, when in reality he was losing millions in investors' money.
Seaman also allegedly misappropriated millions of dollars for personal purchases and made Ponzi-like payments to investors because he did not generate enough profit to pay investors their required monthly distributions.
Seaman and several of the entities he managed are charged with violating the Securities Act of 1993, the Securities Exchange Act of 1934 and the Exchange Act.
