Litigation Releases (Roosevelt Tobias Bailey, et al.)

U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 26057 / July 26, 2024

Securities and Exchange Commission v. Roosevelt Tobias Bailey, et al., No. 1:24-cv-03309 (N.D. Ga. filed July 25, 2024)

SEC Charges Georgia Man and Florida Lawyer for Their Roles in Fraudulent Investment Scheme

On July 25, 2024, the Securities and Exchange Commission charged 68-year-old Roosevelt Tobias Bailey, of Buford, Georgia, and his company, Borg Investment Bank & Capital Trust, with conducting a fraudulent prime bank and gold and diamond investment scheme. The SEC also charged Alvin C. Jones, Esq. of Tampa, Florida, for aiding and abetting the scheme.

The SEC's complaint alleges that, from at least November 2018 until October 2022, Bailey and Borg Bank offered and sold prime bank instrument investments in which investors' money would purportedly pay fees to obtain standby letters of credit that Bailey and Borg Bank would "monetize" to generate high returns. The complaint also alleges that Bailey and Borg Bank pooled investor money to invest in gold and diamond transactions whereby Bailey and Borg Bank would purportedly buy gold and diamonds and sell them for a profit. Bailey and Borg Bank allegedly raised more than $1.6 million from at least 26 investors, but fraudulently used approximately $250,000 to make Ponzi payments to earlier investors and misappropriated at least $410,000 to pay for Bailey's personal expenses including furniture, furs, and personal real estate.

In addition, the complaint alleges that Jones, a licensed attorney, facilitated the fraud by serving as a "paymaster" and allowed investor money to flow through his trust account and then dissipated it at Bailey's direction, despite having received numerous investor complaints about Bailey's fraudulent scheme.

The SEC's complaint, which was filed in the U.S. District Court for the Northern District of Georgia, charges Bailey and Borg Bank with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint further charges Jones with aiding and abetting those violations. The SEC seeks permanent injunctions, disgorgement of ill-gotten gains with prejudgment interest, civil penalties, and conduct-based injunctions against all defendants, and seeks an officer and director bar against Bailey. The complaint also charges another entity owned and controlled by Bailey, Borg Global Holdings, LLC, as a relief defendant, as it allegedly received illicit investor funds from the scheme.

The SEC's investigation was conducted by Kenneth E. Stalzer, Rachel Yeates, and Daniel Konosky, and was supervised by Marc D. Ricchiute, Nicholas P. Heinke, and Jason J. Burt, all of the Denver Regional Office. The SEC's litigation is being conducted by Ms. Yeates, James P. McDonald, and Jacqueline Moessner, and supervised by Gregory A. Kasper, Mr. Heinke, and Mr. Burt.