SEC Complaint against Derek A. Nelson Reveals the Makings of a Criminal
One of the most remarkable cases of securities fraud in recent times is the Ponzi scheme perpetuated by Derek A Nelson of the Capital Mountain Holding Corporation. Derek's company raised nearly $25 million through their scheme and defrauded the investors through their Ponzi scheme before he was caught.
Derek Nelson started his company, Capital Mountain Holding Corporation, as a real estate company. He claimed that his company would take over real estate properties that have become distressed. The company would then refurbish the property or rent it to raise its value to normalcy before selling it off for the full value. It was this idea that Derek used to attract investors.
He enticed the investors claiming that they'd receive 10% interest for 3 months on their investments. The money from the investors would be used for buying real estate properties and restoring them. The profits would be collected from the money made on the sale of restored properties. However, this never took place.
The offering proceeds from the investors were never used to support any legitimate businesses operations. Instead, the money was used for payments to the investors under the Ponzi. The money was also used for buying luxury items and paying the personal expenses of Derek Antony Nelson. It was also used for paying various overhead expenses for different companies that were under the control of Nelson. Additionally, some of the money was transferred to two other companies, Plouteo, Inc. and Homaide Real Estate: Services Corp.