SEC Charges Convicted Fraudster in Real Estate Ponzi Scheme

The Securities and Exchange Commission (SEC) has announced allegations against Wilson Baston, accusing him of engaging in a Ponzi scheme that defrauded multiple investors. Baston allegedly amassed millions of dollars via dozens of transactions, ostensibly to finance real estate investments. Instead, it is charged that he frequently utilized these funds to settle debts with previous investors and cover personal expenses.

Baston, in 2008, confessed to defrauding hundreds of investors through a Ponzi scheme. As per the SEC’s complaint, Baston, post his prison release in 2017, started using pseudonyms, including Chanon Gordon, projecting himself as an expert in real estate. Baston is alleged to have enticed investors to invest in Gordon Management Group LLC, a supposed real estate firm, assuring them their funds would be employed to finance specified real estate deals. In return, it’s claimed Baston provided investors with short-term promissory notes, promising repayment of the capital along with a substantial fee, sometimes up to 25 percent of the investment, within a short period. In certain instances, Baston also pledged a share of profits from a deal. The complaint asserts that contrary to his promises, Baston used the invested money to settle previous investors and for personal use.

Tejal D. Shah, Associate Regional Director of the SEC’s New York Regional Office, stated, “As our complaint alleges, Baston duped investors by adopting an alias to hide his criminal past and by initially disbursing payments to create a deceptive impression of a profitable investment strategy. This case exemplifies the SEC’s relentless efforts to prevent deceitful profiteering at the investors’ expense.”

The SEC’s complaint, lodged in the Federal District Court for the Southern District of New York, accuses Wilson Baston of breaching the antifraud provisions of the Securities Act of 1933 and Securities Exchange Act of 1934. It seeks a permanent injunction, disgorgement plus prejudgment interest, a civil penalty, a conduct-based injunction (which would bar future participation in the sale of promissory notes and investment contracts), and an officer and director bar.

Concurrently, the U.S. Attorney’s Office for the Southern District of New York has announced criminal charges against Wilson Baston.

The ongoing SEC investigation is led by Yitzchok Klug, Mala Bartucci, Daniel Loss, and Michael Paley and is supervised by Ms. Shah. Mr. Loss will be leading the SEC’s litigation. The SEC acknowledges the assistance of the U.S. Attorney’s Office for the Southern District of New York and the Federal Bureau of Investigation