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SEC Accuses Firms of Fraud

September 08, 2004|Kathy M. Kristof

Securities regulators said Tuesday that a complaint was filed against two Westlake Village companies and their principals accusing them of operating a Ponzi scheme that took in $6.7 million.

RC Investment Corp., Pinnacle Investment Corp., Robert A. Coberly Jr., 36, of Westlake Village and Curtis D. Somoza, 36, of Beverly Hills were charged with securities fraud and securities registration violations for offering so-called prime bank notes.

Though investors were "guaranteed" returns of 120%, the complaint alleges that the investment was merely a Ponzi scheme, which used money from new investors to pay old investors and to support Coberly's and Somoza's lavish lifestyles.

Chad Hummel, an attorney for Coberly and Somoza, denied that the venture was a fraud.

"To my knowledge, no lender lost any money and the loans were fully repaid," he said. "I am surprised that the SEC chose to pursue this."

The Securities and Exchange Commission is seeking a permanent injunction and civil penalties in the case.

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