Two brothers accused of operating a Ponzi scheme have reached an agreement with the U.S. Securities and Exchange Commission to resolve the case, which was filed in Georgia.
Tanner S. Adam, 38, of Miami, and Jonathan L. Adam, 42, of Angelton, Texas, were sued Monday by the SEC in U.S. District Court in Atlanta over the alleged scheme, which the SEC said defrauded more than 80 investors.
The following day, the men and the SEC agreed to consent judgments to resolve the case by ordering the brothers to repay investors and barring them from managing investments for clients going forward. Restitution and fines will be determined at a later date by the SEC.
The brothers agreed to the judgment without admitting or denying the allegations. They also waived their right to appeal and agreed to not violate securities laws in the future.
The SEC alleged the Adam brothers offered and sold misrepresented cryptocurrency-related securities throughout the country, including in Georgia, to raise at least $61.5 million between January 2023 and June 2024. Through two Wyoming-based companies, GCZ Global LLC and Triten Financial Group LLC, the Adam brothers offered investors automated crypto-trading products that promised up to 13.5% monthly investment returns, according to the complaint.
The SEC alleges the securities and trading products did not exist. The SEC said the brothers used new investor funds to pay off prior investors while creating the illusion of a profitable venture.
The lawsuit alleges at least $53.9 million of those funds were either misappropriated on personal expenses — including condos, houses, cars and recreational vehicles — or were used to pay interest, finders fees to people who connected them with investors and other prior investors.
The SEC said Jonathan Adam did not disclose to clients that he was convicted in 2004 in Kansas on three felony securities law violations. He was sentenced to 50 months in prison and was ordered to pay more than $314,000 in restitution.
Attempts to reach both brothers and their companies have not been immediately successful.
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