Texas man ran $114 mln Ponzi scheme linked to drowsy driving -SEC

By Jonathan Stempel
Aug 3 (Reuters) - The U.S. Securities and Exchange
Commission on Monday charged a Houston-area businessman with
running a $114 million Ponzi scheme in which he promised big
returns by investing some victims' money in technology to
prevent accidents caused by drowsy driving.
Frederick Alan Voight, 58, and his firm DayStar Funding LP
agreed to pay civil penalties and return alleged illegal gains
in sums to be set by a federal judge, the SEC said. He also
agreed to asset freezes, but neither admitted nor denied
wrongdoing.
Voight, of Richmond, Texas, was accused of having raised at
least $114.1 million from 300 investors since 2004 through
fraudulent note offerings he claimed would fund research at
public companies, including InterCore Inc ICOR.PK , where he
was a vice president and director.
The SEC said this included $13.8 million raised since
October from at least 260 U.S. investors to fund InterCore's
installation of its Driver Alertness Detection System, or DADS,
technology in "several million trucks and buses."
It said Voight promised annual returns of up to 42 percent
from the DADS offering, but that "all $13.8 million is gone."
The SEC said $22 million overall is unaccounted for.
"Mr. Voight is looking forward to having all the facts come
out and putting this matter behind him as soon as possible,"
Brent Baker, a lawyer for Voight, told Reuters. He also said the
$22 million number will "go down substantially."
In a Ponzi scheme, early investors are usually paid with
money from later investors.
The SEC said it plans to pursue related claims against
Delray Beach, Florida-based InterCore and a Montreal-based unit.
The SEC complaint did not itemize how Voight used most of the
funds raised.
A lawyer for the company did not immediately respond to a
request for comment. InterCore was not accepting phone calls or
emails on Monday.