Horizon Private Equity and John J. Woods Ponzi Scheme Lawsuit Investigation

On August 20, 2021, the SEC charged investment advisor John J. Woods with operating Horizon Private Equity, III as a Ponzi scheme for more than a decade, using new investors’ funds to pay previous investors.  According to the SEC, millions of dollars in investors’ funds are currently unaccounted for.

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SEC Lawsuit Alleges Widescale Fraud, Ponzi Scheme

According to the SEC lawsuit, Horizon’s own bank accounts reveal that new investor money was used to make interest payments to existing investors. 99% of funds deposited in Horizon’s bank account in April 2021 consisted of new investor funds, and Woods and Horizon have raised more than $600,000 more in new investor money in recent months, according to the complaint.

The SEC says Horizon investors were told their money would be invested in stocks, government bonds, and small real estate projects, and that they could expect to 6%-7% returns guaranteed for 2-3 years. According to the lawsuit, most investors were not provided written investment materials, and were led to believe that they could recover their principal without penalty after a brief waiting period.

Millions of Investor Funds “Unaccounted For”

The reality, according to the SEC, is that investors are owed $110 million in principal, but Horizon’s assets are worth significantly less than the amount owed.   In addition, because Horizon failed to follow basic record-keeping practices, the SEC says millions of dollars in investors’ funds are currently unaccounted for.

A federal judge granted the SEC’s request for emergency relief on August 24, ordering Woods’s and Horizon’s assets frozen, and appointed a receiver to control Horizon’s assets and some of Woods’s assets.

About John J. Woods, Horizon Private Equity Fund, III and Southport Capital

John J. Woods was formerly registered as a financial advisor with Oppenheimer, and is also affiliated with investment advisory firm Southport Capital, an advisory firm with more than $824 million assets under management.

Horizon has more than 400 investors from 20 different states—many of whom are retirees. In some instances, Southport advisors allegedly encouraged clients to sell existing investments and invest the proceeds in Horizon, resulting in significant compensation for the advisors.

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