Valencia tax preparer charged in alleged Ponzi scheme

A Valencia man who makes a living preparing peoples’ taxes is one of two men charged by the Securities and Exchange Commission this week in an alleged ponzi scheme.

The Securities and Exchange Commission filed fraud charges Wednesday against Scott Allensworth, 64, who runs a business on Springbrook Avenue called Capital Growth Group Associates, and against David Weddle, who lives in Somserset, Kentucky, and is the majority owner of a Kentucky-based company called JustInfo LLC.

The Commission alleges the two men solicited investors on behalf of JustInfo LLC and that they lied to investors in a futures trading scheme.

It alleges, in the complaint filed Wednesday, that the pair raised at least $2.84 million from at least 57 investors by selling investment contracts.

It also alleges that, throughout the period of the offering, Allensworth and Weddle stole at least $1 million for their own use and made payments of purported returns to prior investors in classic Ponzi-fashion.

Weddle allegedly created false trading reports, which Allensworth sent to investors, to cover up JustInfo’s trading losses and maintain the appearance that the investment was profitable, according to news release issued Wednesday by the commission.

Allensworth is described in the commission’s complaint as a non-CPA tax preparer who provides tax preparation and accounting services. He holds no securities licenses, according to the commission, and has never been registered with the Commission in any capacity.

As well, he is the sole signatory on the Capital Growth Group Associates bank account.

Allensworth, Weddle and JustInfo are charged specifically with violations of the Securities Act of 1933. Without admitting or denying the allegations in the SEC’s complaint, JustInfo and Weddle consented to the entry of final judgments permanently enjoining them from violating the charged sections of the federal securities laws.

JustInfo and Weddle were ordered to pay $388,322.34 and interest for profits obtained by illegal or unethical acts, for which they will be jointly and severally liable, and civil penalties were imposed on Weddle and JustInfo of $373,037 and $905,353, respectively.

According to the Commission’s complaint against him, Allensworth - prior to soliciting clients for the

JustInfo scheme - had solicited clients from his tax preparation business to invest in a prior futures trading scheme run by an individual who has not been charged in this action.

In early 2014, Allensworth had induced investors to invest more than $280,000 in the prior scheme.