Company promise of easy money was actually $75M Ponzi scheme, feds say
Income Store used new investors' cash to pay old investors, according to SEC
A company that offered investors a hands-free monthly income with no skills required was actually a Ponzi scheme that duped more than 500 investors out of at least $75 million, according to the Securities and Exchange Commission.
SEC officials said on Wednesday that they had obtained an emergency enforcement action and asset freeze against the company, Todays Growth Consultant, which also operated as The Income Store, and its owner, Illinois resident Ken Courtright.
The company builds websites selling a variety of products. To solicit investors, the company said it would pay them half of what their websites generated each month and would guarantee a minimum monthly return if revenues fell too low. Depending on the size of the initial investment, the company would guarantee returns between 13 percent and 20 percent each month, SEC attorneys said in the complaint. For example, one investor put in $150,000 with a guarantee of at least 18 percent — $2,250 — to be paid back per month forever.
That was “unsustainable,” according to the complaint. Between January 2017 and October 2019, TCG’s investor websites generated about $9 million in sales, but the company paid investors at least $30 million during the same time. To make up the difference, TCG funded the gap by bringing in new investment “in classic Ponzi-like fashion,” the attorneys said.
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TCG also diverted millions in investor money for Courtright’s personal expenses like his mortgage and family members’ private school tuition, according to the SEC.
To bring in more money and draw more investors, the company advertised on satellite radio and online.
“Of all the ways to create a consistent and passive income stream, purchasing an existing, revenue-generating website is the smartest,” incomestore.com — which is no longer online — used to state.
Officials said the company “recklessly” lied to investors.
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TCG and The Income Store built websites, but officials said they were actually a Ponzi scheme.
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The company told investors it was temporarily halting payouts until April. But officials said TCG continued soliciting potential investors. In November 2019 alone, it raised $2 million from investors.
A judge ordered the SEC’s asset freeze on Dec. 30 and appointed a receiver to sort out the situation for the investors.
Thinking about making an investment? The SEC has a list of Ponzi scheme “red flags” it suggests would-be investors watch out for before handing over their cash.