The SEC is accusing a Bethesda man of operating a Ponzi scheme that lost middle class investors, churches and a charity for children with special needs millions of dollars. Garfield Taylor promised a 20 percent return on investments, according to SEC allegations, but records show the investments Taylor and his associates, which included family members and friends, were making were risky and lost millions.
Stephen Cohen with the SEC says Taylor even forged documents in a desperate attempt to woo new clients: "People believed that they were actually earning money on their investments, but in fact in he was bringing in new investors and taking their money and giving it to older investors."
One of the clients was the Hillcrest Children and Family Center. The charity, founded almost 200 years ago to help orphans of the war of 1812, invested $8 million, about half of its total endowment with Taylor. All of that money used to help children with special needs was lost.
"Mr. Taylor and others skimmed about $5 million out of moneys that they brought in and used it to pay for personal expenses," says Cohen.
Some of that money was allegedly used to pay $73,000 for the private school tuition of Taylor’s children.
Taylor did not answer the door of his multimillion dollar home in north Bethesda when we tried to get his side of the story. The civil lawsuit is seeking an injunction against Taylor and five associates from further investment trading and the return of as much as $27 million to Taylor’s clients.