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SEC alleges Hallandale cash advance firm defrauded 3,400 investors out of $287 million

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The U.S. Securities and Exchange Commission has filed civil charges against 1 Global Capital of Hallandale Beach and ex-CEO Carl Ruderman for allegedly defrauding at least 3,400 retail investors out of $287 million.

Federal prosecutors based in South Florida are also investigating the company, which advertised itself as a lending firm that provided cash for small businesses in need. 1 Global and several affiliates filed for Chapter 11 bankruptcy protection in late July after word of federal inquiries effectively shut off its access to fresh funds, according to bankruptcy court papers.

In its complaint filed in U.S. District Court in Miami, the commission alleges that the cash advance company and Ruderman fraudulently raised millions by selling unregistered securities to investors through a network of agents that included brokers barred from the industry. Ruderman moved money to several other companies he controlled, including one that formerly owned Playgirl Magazine and other adult publications, the SEC alleged. He also misappropriated $35 million, the complaint says, to finance a vacation to Greece, buy a Mercedes-Benz and pay a personal chef.

“We allege that 1 Global’s business model was a sham because instead of using investor funds as promised, 1 Global and Ruderman diverted significant funds, including to Ruderman himself for his personal benefit,” Eric I. Bustillo, director of the SEC’s Miami Regional Office, said in a statement. “The SEC’s investigation effectively stopped 1 Global’s offering and prevented further harm to investors and retirement funds.”

By DAVID LYONS
SOUTH FLORIDA SUN SENTINEL

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