Court order to halt fraud targeting SD investors
The Securities and Exchange Commission announced Friday it has obtained an emergency court order to halt an alleged securities fraud targeting investors in the Somali immigrant community in San Diego and elsewhere.
The complaint names Mohamud A. Ahmed, 45, of Spring Valley, and his company, Shidaal Express, Inc., which operates in the San Diego area.
The SEC alleges Ahmed formed Shidaal Express to provide check-cashing, money transfer, and other financial services for the Somali immigrant community, and a sign at one storefront location listed “Investment
Opportunities” among services provided.
Regulators contend Ahmed raised at least $3 million, including $200,000 from a San Diego mosque, by promising exorbitant guaranteed returns of 5 percent per month, or 60 percent annually.
Such alleged scams are known as “affinity fraud” because they prey upon members of identifiable groups, such as religious or ethnic communities.
“Affinity fraud schemes are particularly egregious because they prey on the trust of innocent and vulnerable investors,” said Michele Wein Layne of the SEC. “This action demonstrates the SEC’s continued vigilance to pursue such cases.”
The SEC accuses Ahmed and Shidaal Express with committing securities fraud by making false and misleading statements to persuade people to invest with them.
According to the complaint, Ahmed solicited investors through word-of-mouth, at a mosque in San Diego, at a presentation given in a hotel in Washington state and through the Shidaal Express Web site.
The SEC alleges that Ahmed lured investors by assuring them they could receive their money back at any time.
While initially paying investors monthly returns, the complaint alleges Ahmed tried to extract more money from the investors, and eventually stopped paying monthly returns entirely.
U.S. District Judge Jeffrey T. Miller in San Diego federal court has set a Nov. 30 hearing on the SEC’s motion for a preliminary injunction and appointment of a permanent receiver.
This story was written and edited by City News Service staff.
Tags: affinity fraud, alleged securities fraud, emergency court order, Inc., Michele Wein Layne, Mohamud A. Ahmed, SDNN, securities and exchange commission, Shidaal Express, Somali immigrant community, U.S. District Judge Jeffrey T. Miller
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