Is this the stuff of Hollywood? The Federal Bureau of Investigations (FBI), the Securities and Exchange Commission (SEC), and a slew of disgruntled clients are looking for Christopher Burns, a 37-year-old Atlanta, GA-area advisor who has been missing since September 24, 2020. If you see him, call someone.
Burns is alleged to have scammed nearly 100 investors as part of a Ponzi scheme involving the sale of illegal promissory notes. Burns, his various business entities, and his non-missing, suddenly ex-wife Meredith Burns as a relief defendant are charged with the usual: defrauding investors and misappropriating investor funds.
According to the SEC’s complaint, Burns, through his investment advisory firm Investus Advisers (doing business as Dynamic Money), sold more than $10 million in promissory notes issued by two of his other companies — Investus Financial and Peer Connect — to investors.
From at least February 2017 to September 2020, Burns and his companies sold promissory notes to dozens of investors in Georgia, North Carolina, and Florida. He advised his clients that this was an investment opportunity alleged to be part of a peer-to-peer lending program for businesses in need of capital. Burns allegedly claimed the notes were backed by collateral held in accounts at Charles Schwab and that they presented little or no risk. Moreover, the businesses borrowing the cash would either make monthly payments that included a portion of the principal plus a fixed amount of interest or pay a lump sum when the promissory notes matured.
The notes extended a few weeks or as long as several years. The rate of interest varied – at the highest 20 percent. Burns also signed a personal guarantee to pay 100 percent of any principal loss for each promissory note.
There was no peer-to-peer lending program. As is typical Ponzi, Burns spent the money he raised to repay earlier investors, fund his lifestyle, and promote himself as a star investment advisor. He bought tens of thousands of dollars’ worth of local radio airtime for his paid, promotional radio show.
Adding insult to injury, Burns continued to push promissory note sales until late September when he disappeared with investor cash. From September 15 through September 23, 2020 – the day before he disappeared, Burns received nearly $320,000 in investor proceeds. One day later, he transferred all but $75 to his personal bank accounts or withdrew the money as cash. Burns then entered into a divorce agreement with his wife one day before he disappeared and before he was to turn over documents to the FBI.
The divorce agreement transferred many of the couple’s joint assets to Meredith. His interest in their home transferred to her the day he dropped out of sight.
What did Meredith know?
The SEC claims that although Meredith Burns had no income independent of her husband, she possessed other assets that seemed to be bought or maintained with investors’ assets. These included a boat, cars, and cash in her bank accounts.
On the day the SEC filed the complaint, the same court entered an order temporarily restraining the defendants from violating the charged provisions of the federal securities laws, instituting an asset freeze, and ordering other relief.
The vehicle Burns was driving was found abandoned in Dunwoody, Georgia. Inside were copies of three cashier’s checks totaling over $78,000. Meredith is still in the family house.
Where was compliance?
Bigger question. Was there any compliance whatsoever? Probably not. Or possibly in cahoots? Perhaps, that’s where Patrina could have helped. For more than 25 years, Patrina has been helping compliance professionals like you stay on the “straight and narrow” efficiently and cost-effectively. So, let’s talk. Call 212-233-1155 to ask about Patrina’s cost-effective, designated third-party services, our comprehensive, 8-module compliance solution, and compliant data capture, file storage, and records archiving specifically designed for the financial services community. Be smart. Be covered. Let’s talk.