The Securities and Exchange Commission (SEC) has announced charges against a Florida individual who allegedly defrauded investors in a digital asset trading scheme, according to a court filing.
The SEC alleges that Thomas J. Gity, said to be a convicted felon with no professional financial industry experience, received at least $6.8 million from at least 18 investors. According to the complaint, Gity claimed to be a highly-profitable digital asset trader who never lost money during a trading day. The complaint states that Gity has received two Rhode Island felony convictions: in 1994, for racketeering, operating an organized crime gambling business, and conspiracy, for which he served time in prison.
Gity apparently provided fake account statements to investors to create the illusion that he managed as much as $100 million in assets generating high returns.
The SEC claims that Gity transferred only $970,000 of the $6.8 million received from investors into trading accounts. Gity allegedly transferred over $1.8 million of investor funds to his son and spent the remaining funds to make Ponzi-like payments to investors and on personal expenses and gambling.
The SEC’s complaint, filed in federal court in Miami, charges Gity with violations of the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and Section 17(a) of the Securities Act of 1933.
The complaint also names Gity’s son, Thomas Gity, Jr. and Gity Jr.’s company, Treasure Coast Property Enterprises, LLC, as relief defendants. The SEC seeks a civil penalty and injunctive relief against Gity, including a conduct-based injunction that prevents Gity from participating in securities offerings. The complaint also seeks disgorgement with prejudgment interest from Gity and from the relief defendants, as well as an order freezing the assets of Gity and the relief defendants.