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SEC Charges Pennsylvania Attorney and Swiss Resident in $1.4 Million Dollar Ponzi Scheme

On March 18, 2020 the SEC announced charges against Todd Lahr and Thomas Megas for allegedly selling unregistered securities and operating a Ponzi scheme to defraud investors. The complaint alleges the Pennsylvania attorney and Swiss resident sold over $1.4 million in unregistered securities through their companies THL Holdings, LLC and Ferran Global Holdings, LLC.

Lahr formed THL Holdings in 2012. He sold investors high-interest rate promissory notes and membership units of THL Holdings. The complaint suggests Lahr solicited clients of his law firm to invest. Lahr represented to potential investors that the funds were to be invested in several promising business ventures led by Megas, including mining operations and real estate opportunities. Ultimately, Lahr sold over $1 million of unregistered securities to 20 investors.

Despite telling investors their funds would be invested in Megas’ business ventures, THL Holdings received no returns on any alleged investments. Instead, Lahr allegedly used money from new investors to make interest payments owed to earlier THL investors, creating an illegal Ponzi scheme. The complaint also alleges Lahr used over $10,000 of investor funds to pay various personal expenses such as credit card bills and tuition payments. The Ponzi payments allegedly continued through 2015 when new investor money began to run dry. The complaint alleges that Lahr became increasingly stressed and worried THL Holdings would default on interest payments and even convinced family and friends to invest in order to keep the Ponzi scheme afloat.

As an alleged solution, the defendants jointly formed Ferran Global Holdings, LLC to attract new investors. Potential and actual investors were again told their investments would be invested in Megas’ business ventures. After initially selling over $140,000 of unregistered securities in Ferran Global, the defendants allegedly used the funds to make interest payments owed to THL Holdings investors. This process is alleged to have happened multiple times during 2015. Megas also allegedly began using thousands of dollars in investor funds to pay personal expenses. This allegedly led Ferran Global funds to be depleted within the year and Lahr again began selling unregistered securities of THL Holdings until 2017.

The SEC alleges Lahr and Megas knowingly participated in the fraudulent sale of unregistered securities, misappropriated client investments, and deceived investors in order to secure funds for their illegal activities. The complaint charges the defendants with violating the antifraud and registration provisions of Sections 5(a) and (c), and 17(a)(1) and (3), of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934, and Rules 10b-5(a) and (c) thereunder.

You can find more information on this case and access the SEC Complaint at the following link https://www.sec.gov/litigation/litreleases/2020/lr24778.htm.htm. If you have any questions about this or other securities-related issues, please contact Tomlinson & Shapiro, P.C. at (312) 715-8770.

Michael Shapiro
(312) 715-8770
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