Commission Resolves Ponzi Scheme and Offering Fraud

Ponzi schemes have been a key focus for SEC enforcement at least since the days of Bernie Madoff. The typical Ponzi scheme is, in reality, nothing but a lie or sham transaction – the operator sells shares of a company that does not actually exist. In the Commission’s most recently settled such action, the Ponzi scheme was only one facet of the fraud. The other was a scheme that supposedly provided guaranteed returns for investors, an offering fraud. There were no returns. SEC v. Bryant, Civil Action No. 4:17-cv-00336 (E.D. Tex.).

Named as defendants in the action were Thurman P. Bryant, III; Bryant United Capital Funding, Inc.; Arthur F. Wammel; and Wammel Group LLC.

In May 2017 Mr. Bryant and Bryant United raised about $22.7 million from investors. Investors were told that if they acquired interests, they would have guaranteed investment returns in the mortgage industry. A related operation conducted by Defendant Wammel and his firm, Wammel Group. It was a Ponzi scheme that raised about $44.7 million. The complaint alleged violations of Securities Act Section 17(a) and Exchange Act Section 10(b).

Respondents resolved the matters, consenting to the entry of permanent injunctions based on the Sections cited in the complaint. Specifically, the court enjoined Mr. Bryan and Bryant United from future violations of the two Sections cited in the complaint. In addition, Mr. Bryant and his firm were directed to pay disgorgement of $5,989,605.50 along with prejudgment interest of $227,392.17. The final judgments deem those amounts paid by the sums collected by a court-appointed receiver, and distributions to investors and by the restitution of $9,103,088.12 ordered against Mr. Bryant, in U.S. v. Bryant, No. 4:17-cr-00213 (E.D. Tx.) and against Mr. Wammel in U.S. v. Wammel, No. 4:17-cr-00213 (E.D. Tx.). See Lit. Rel. 26252 (Feb. 20, 2025).