Would You Like Some Turkish Promissory Notes With Your Dessert?

The Securities and Exchange Commission has obtained an emergency court order to shut down an alleged Ponzi scheme targeting retirees in California and Illinois who are invited to estate planning seminars and later coaxed to buy promissory notes for purported Turkish investments. 

The SEC alleges that USA Retirement Management Services (“USARMS”) and managing partners Francois E. Durmaz and Robert C. Pribilski mass mailed promotional materials to prospective investors and invited them to estate planning seminars held at country clubs and banquet halls. According to the SEC, they gained retirees' confidence in follow-up meetings and portrayed themselves as educated and experienced in foreign investments specifically tailored to the needs of seniors. The SEC also alleges that Durmaz and Pribilski then pitched what they represented as safe, guaranteed investments in "Turkish Eurobonds" through the purchase of USARMS promissory notes that would earn annual returns between eight and 11 percent.
 
The SEC alleges that:  USARMS raised at least $20 million from more than 120 investors, but did not actually invest the money in Turkish Eurobonds as promised. Instead, returns were paid to earlier investors with funds received from new investors in Ponzi-like fashion. Durmaz and Pribilski further misused investor funds to finance their other businesses and purchase such things as luxury automobiles, homes, vacations, and web-based pornography. They also wired investor money into bank accounts belonging to individuals living in Turkey who are named as relief defendants in the SEC's case.
 
According to the SEC's complaint, Durmaz and other USARMS employees provided seminar attendees a general presentation on estate planning and later sent them a letter inviting them to their offices for a personal consultation "to explain the amazing steps you must take when you set up a Living Trust or Will."
 
The SEC alleges that once seminar attendees went to their estate planning appointments, Durmaz examined their personal financial information and told prospective investors that they had issued hundreds of millions of dollars in USARMS promissory notes. In addition, Durmaz falsely claimed that he held a Masters of Business Administration (MBA) and was a Certified Senior Advisor (CSA). Thus, prospective investors were led to believe that Durmaz was educated and experienced in investments specifically tailored to the needs of seniors and retirees.