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SEC says gambling ring involved in Ponzi scheme
Blake A. Prater, who is allegedly behind an alleged Internet Ponzi scheme according to the US Securities and Exchange commission, also operated a “production gambling”, according to court documents and Prater.
The company, Mpactplayers, Ltd., sent teams of five employees to the Mohegan Sun and Foxwoods casinos, where they would gamble $300 and $2,400 on craps in four hour shifts, two former employees said. The players allegedly used a gambling system thought up and taught by Prater.
In September the SEC filed a civil lawsuit alleging that Prater was selling unregistered securities through Wellspring Capital Group, Inc. to fund a Ponzi scheme designed to defraud customers. In a filing for the lawsuit, the SEC describes the gambling company to bolster its claims that Prater sold unlicensed investments.
Prater said that Mpactplayers gambling money wasn’t from Wellspring clients, but wouldn’t say where the gambling stakes came from.
The SEC alleges that Prater solicited money from a Web site to fund the gambling business that promised $360 return on a $20 investment.
In documents taken from Prater’s home, Prater claimed to have won $2.9 million from Connecticut casinos, the SEC says.
