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The owners of a Prince George’s County investment firm have been fined $17.2 million and banned from offering investment or security services in the state after running the operation in a manner that court documents said was similar to a Ponzi scheme.
How much of that fine will actually be recovered is unclear: The consent order in the case said the penalties would be deferred pending the outcome of bankruptcy filings by the two companies involved, Prosperity Partners Inc. and Prosperity Medical and Health LLC.
The case was brought by the Maryland Securities Division against the companies and Mathias Bama, Valentine Bama and Hilaire Leunkam, who operated the companies. It said the companies solicited investments that promised a return of 6% a month, for an annual return of 72%, at which time investors could ask for a return of their principal or could reinvest their funds.
The companies attracted $28.9 million in investments, mostly from Cameroonian and Nigerian communities, court documents show. They said early investors appear to have received just under $12.4 million in payments on their investments.
But the state said none of the money was put toward investments that would produce a 6% monthly return.
“Respondents appeared to be paying monthly interest payments to investors out of those investors’ own invested capital, or out of funds from later investors — the way payments to investors are made in a Ponzi scheme,” court documents show.
Investors were not told that the officials were paying themselves a 5% commission out of the invested funds, or salaries ultimately ranging from $75 to 150 an hour.
Several family members also received hourly pay and the officers made more than $2 million in uncategorized expenses from June 2019 to December 2021. Bama also used investment funds to buy a 2022 Infiniti, documents show.
“When Marylanders give their hard-earned money to companies, they trust that it will be protected and used wisely. Investments are made with the hope of a better future, and companies that put hardworking families’ futures at risk will be held accountable,” Maryland Attorney General Anthony Brown said in a statement announcing the court decree. “We will continue to protect Maryland investors by holding fraudsters accountable.”