New York, NYCarr Miller Capital LLC and its three principals are facing allegations of consumer fraud regarding a Ponzi scheme and violations of numerous New Jersey Uniform Securities Laws by committing fraud, commingling funds, and selling unregistered securities. It is believed that investors may have been defrauded of as much as $40 million.
An investigation by the New Jersey State Bureau of Securities has revealed that 13.5 million of investors' funds were used to pay for personal automobile purchases, a New Jersey Devils sky box at the Prudential Center in Newark, retail purchases and meals and travel and luxury vacations, among other things. A further $16 million was placed into various other investment vehicles such as hedge funds, real estate, film production companies, and an oil and gas venture. These ventures were reportedly not authorized by or disclosed to investors. Moreover, the securities that Miller and the Carrs offered investors were not registered for sale in New Jersey and Miller was not registered to act as an agent.
The Bureau of Securities has subsequently revoked the Investment Advisor registrations and exemptions of Carr Miller Capital, Capital Markets Advisory LLC, Miller, and Ryan J. Carr, and Brian P. Carr effectively barring them from the state's securities industry. Additionally, assets held by Everett Charles Ford Miller, and his related companies have been frozen by court order, with a receiver appointed to oversee control of the assets.
Carr Miller Capital offered nine-month notes that reportedly provided rates of return between 10% and 15% annually. Some investors were told they could renew the notes for additional nine-month terms or be paid out at the end of the term. Approximately $8 million of the $40 million was sent to investors as "interest" payments, however those funds turned out to be new investors' capital that was used to keep the Ponzi scheme going.
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