The Securities and Exchange Commission charged a Noblesville resident with running a $6 million Ponzi scheme that defrauded investors out of their retirement savings and used the money to invest in a bridal store, a bounty hunter reality television show, and a soul food restaurant owned by the bounty hunters.
John Marcum, 49, is accused of deceiving at least 37 people into investing in promissory notes issued by his firm by promising double-digit annual returns with no risk to principal by day-trading in stocks. On Aug. 26, the SEC stated it obtained an emergency court order to freeze the assets of Marcum and his firm, Guaranty Reserves Trust LLC.
“Marcum tricked investors into putting their retirement nest eggs in his hands by portraying himself as a talented trader who could earn high returns while eliminating the risk of loss,” stated Timothy Warren, acting director of the SEC’s Chicago regional office. “Marcum tried to carry on his charade of success even after he squandered nearly all of the funds from investors.”
According to the SEC’s complaint filed in federal court in Indianapolis, Marcum began his scheme in 2010. The SEC alleges that Marcum assured investors he could safely grow their money through investments in widely-held publicly-traded stocks, and he promised annual returns between 10 percent and 20 percent. He also told a number of investors that their principal was “guaranteed” and would never be at risk. In the little trading he has done, Marcum has suffered losses amounting to more than $900,000.
He spent nearly $1.4 million of investor money to finance several start-up companies. Marcum allegedly also used more than a half-million dollars to pay personal expenses accrued on credit card bills, including airline tickets, luxury car payments, hotel stays, sports and event tickets, and tabs at a Hollywood nightclub.