Lured about 140 to buy promissory notes touting returns of up to 33%
Eric J. Aronson, a New York man who wrote a self-help book after pleading guilty to fraud more than a decade ago, was accused by U.S. regulators today of operating a $26 million Ponzi scheme in which he used investor funds to pay court-ordered restitution to victims of his earlier fraud.
Aronson, 43, lured about 140 people to buy promissory notes from companies he controlled including PermaPave Industries LLC, touting returns of up to 33% on investments in natural- stone pavers imported from Australia, the Securities and Exchange Commission said in a complaint filed today in Manhattan. U.S. attorneys filed related criminal charges against Aronson today, the SEC said.
Aronson and other executives used new investor funds collected between 2006 and 2010 to make payments to earlier customers and siphoned off money to buy themselves luxury cars, jewelry and gambling trips to Las Vegas, according to the complaint. Aronson, who penned the 2007 book “DASH” with a first chapter entitled “The Buffet of Life,” misappropriated about $2.6 million through two other companies he solely controlled, using the money to pay back victims of a scheme to which he pleaded guilty in 2000, the SEC said.
Randy Zelin, an attorney for Aronson and PermaPave, declined immediate comment.
Aronson and his associates “created the facade of a profitable business, promised investors extraordinary rates of return, and used much of their investors’ money to fund their own lavish lifestyle,” George Canellos, head of the SEC’s New York office, said in a statement.
The SEC is seeking to bar Aronson from serving as an officer or director of a public company, as well as the return of illicit profits and unspecified fines.