(CMR) The Securities and Exchange Commission (SEC) has filed an emergency action in federal court in the Southern District of New York on Monday charging a Cayman Islands-registered offshore fund and two individuals with engaging in a fraudulent scheme. It issued the asset freeze against Americans Ofer Abarbanel (46) and Victor Amadeo Chilelli (51) and their company Income Collecting 1-3 Months T-Bills Mutual Fund.
The SEC alleges that from at least 2018 to the present the duo engaged in a scheme to defrauded investors in this offshore mutual fund by representing to the investors that the fund would primarily invest in U.S. Treasury securities. They also claimed that the fund would enter into certain types of reverse repurchase agreements with U.S. Treasury securities serving as collateral.
The complaint alleges that instead, the fund routed investor funds to shell companies under the directors' control. Investors attempted to access $106 million in investments last month only to discover that Abarbanel and Chilelli have transferred funds into an account from which no redemption could be drawn. Of the $191 million they raised from one investor group, about $102 million was allegedly invested in a brokerage account in the name of shell company North American Liquidity Resources.
The SEC has charged them with violating the antifraud provisions of the federal securities law and seeks permanent injunctions, disgorgement with prejudgment interest, civil penalties, and permanent bars against participating in future securities offerings.
The SEC is now sharing that they are moving quickly to try and protect investor funds “from potential dissipation and misappropriation”.
Ofer Abarbanel is an Israeli citizen living in Woodland Hills, California he is accused of “exercising control over the fund with the substantial assistance of Chilelli.” Chilelli is from Delaware and New York and is said to be the person that founded the shell companies and setup up their bank and brokerage accounts.
Ofer Abarbanel portfolio includes being the Chief Executive Officer & Owner at Institutional Secured Credit LLC and President, CEO, CFO, Secretary & Trustee at State Trust. In his past career, Mr. Abarbanel held the position of Chief Executive Officer & Chief Financial Officer at New York Alaska ETF Management LLC and Chief Executive Officer & Owner at Contact Prime Brokerage Ltd.
According to his LinkedIn account, Chilelli is an institutional investment manager and attended St. John's University in Queens, New York where he received a bachelor's degree in finance. His resume further claims he has over 30 years of experience in finance, banking and insurance. He also worked as a sales agent for Coldwell Banker Resort Realty in Delaware.