SEC Accuses Florida Man Of Running $17 Million "Lead Generation" Ponzi Scheme
The Securities and Exchange Commission has filed an emergency enforcement action accusing a Florida man of running a Ponzi scheme that raised at least $17 million from over 100 investors who thought they were investing in an online lead generation business that promised annual returns ranging from 10%-60%. Jonathan P. Maroney, 50, Harbor City Capital Corp. (“Harbor City”) and a number of related entities were named in a complaint filed in the Middle District of Florida accusing them of violating federal securities laws. The Court granted the Commission’s emergency request for a temporary restraining order and an asset freeze and has scheduled a hearing for later this week.
According to the Commission’s complaint, Maroney and Harbor City began soliciting investors in mid-2015 promising monthly returns ranging from 1% to 5% in exchange for providing bridge funding that would be used to sustain Harbor City’s business of generating online customer lead campaigns for other businesses. The offering documents provided to investors promised that “the leads generated from the campaigns were to be sold at a substantial profit to Harbor City’s “pipeline” of business clients within the “$200 Billion internet advertising sector.”
Initially, in mid-2015, investors received promissory notes or agreements issued by Harbor City Ventures LLC (“HC Ventures”) that promised annual returns ranging from 24% to 60%. In late 2018, the investment vehicle shifted to several “special purpose vehicles” formed by Maroney that issued high yield secured bonds promising monthly returns ranging from 1% to 1.5%. Investors were solicited primarily through Harbor Capital’s website or through a Youtube channel that Maroney maintained, with the latter publishing videos touting the investment opportunity as “safe as a CD” and describing the bonds as “100% secured by a cash asset-backed instrument issued by a major top-tiered bank, which ensures return of principal.” Some investors also were attracted to the opportunity through Facebook advertisements. One of the Youtube videos published by Maroney is below:
In reality, the Commission alleges, Maroney and his entities only used a small portion of investor funds to actually fund the lead generation business. Indeed, the Complaint alleges that Harbor City “generated no significant revenues from its customer lead generation businesses or from any other venture” from January 2017 to February 2021. Instead, the majority of investor funds were allegedly diverted for unauthorized purposes including:
$1.35 million to pay his credit card bills,
$827,000 towards the purchase and maintenance of his waterfront home
$808,000 towards housing and renovation-related expenses
$90,000 to purchase a Mercedes Benz
$265,000 in cash or ATM withdrawals
$394,000 deposited into a joint bank account with his wife, Tonya Maroney, and
$58,000 towards his wife’s credit cards
Maroney also allegedly invested approximately $1 million of investor funds into an unrelated shipping company and used over $6 million to make monthly interest payments to investors.
A copy of the Complaint is below: