ATLANTA, Georgia - A former Georgia state legislator and former senior member of the Board of Regents of the University System of Georgia (USG) has been charged with operating a Ponzi scheme.
Clarence "Dean" Alford, 67, who was born in Atlanta, Georgia, served as a Republican member of Georgia's General Assembly from 1983 to 1993. He became a member of Georgia's Board of Regents in 2012 and served until his resignation last year. While on the Board of Regents, Alford at one time chaired the Committee on Economic Development, and at various times was a member of the Committee on Finance and Business Operations; the Committee of Internal Audit, Risk & Compliance; and the Committee on Real Estate and Facilities.
Separately, Alford helped establish the Miracle League, an organization that provides baseball fields for kids with mental and physical disabilities, which has lead to the creation of more than 240 baseball fields in the U.S. and Canada.
On Thursday it was announced Alford has been charged with enticing 100 investors to invest in his now-bankrupt energy development company, Allied Energy Services LLC.
According to the the U.S. Securities and Exchange Commission (SEC), in a statement published on Thursday, from 2017 to 2019, Alford fraudulently raised at least $23 million by selling promissory notes to investors primarily Indian-American professionals that he guaranteed would provide high annual rates of return.
According to the complaint, Alford presented Allied as a successful business when in fact it was struggling, and claimed that investors' funds would finance energy projects while using most of the funds to make interest payments to earlier investors and for personal expenses, including building a multmillion-dollar home.
In 2019, Alford's alleged scheme collapsed when he failed to make promised interest payments to several investors and then failed to repay the investors' principal.
"As alleged in our complaint, Alford was a prominent member of the community who misled retail investors for personal gain," Justin Jeffries, Associate Regional Director for the SEC's Atlanta Regional Office said Thursday. "Investors should be wary whenever they are promised guaranteed, lucrative investment opportunities."
Without admitting or denying the allegations, Alford consented to entry of a judgment finding that he violated the antifraud provisions of the federal securities laws and ordering permanent and conduct-based injunctions. Alford also agreed that the amounts of civil penalties, disgorgement, and prejudgment interest would be determined by the court at a later date upon motion by the SEC. The proposed judgment is subject to court approval.
Staff in the SEC's Atlanta Regional Office conducted the investigation and will lead the litigation. The SEC in its statement noted the assistance of the Georgia Secretary of State's Securities Division.
(Photo credit: USG).