September 18, 2019
By Brian Bandell
Federal prosecutors have accused Fort Lauderdale attorney Jan Douglas Atlas of helping 1 Global Capital LLC defraud more than 3,600 investors.
The Securities and Exchange Commission also filed a civil lawsuit against Atlas over securities law violations involving 1 Global Capital.
The Hallandale Beach-based financial company, which provided loans to small businesses, filed Chapter 11 in U.S. Bankruptcy Court in 2018. Soon after, the SEC filed civil fraud charges against 1 Global Capital and former CEO Carl Ruderman, alleging they fraudulently raised $322 million from investors.
In August, former 1 Global Capital CFO Alan G. Heide pleaded guilty to criminal fraud charges for authorizing false financial documents for company. He will be sentenced Dec. 12.
In the latest development, Atlas was charged with securities fraud in federal court in Miami on Tuesday. As outside counsel for 1 Global Capital, Atlas authored a legal opinion he allegedly knew was false: that the company’s investment products were not a securities offering as regulated by the SEC, according to court documents.
“Jan is a good man who had a wonderful, successful career. But like all of us, he wasn’t perfect,” said Anita Margot Moss, his attorney in the criminal case. “He has quickly accepted responsibility for his actions in this case and shown genuine remorse. He will do everything he can to make this right.”
Atlas and his attorney, Anita Margot Moss, couldn’t be reached for comment.
Prosecutors said Atlas was paid $627,000 for his services to 1 Global. They asked that any funds Atlas received from fraudulent activity be forfeited, court documents said.
If found guilty, Atlas could face up to five years in prison.
According to the SEC lawsuit, 1 Global overstated the value of investors’ accounts and their rate of returns, and misappropriated at least $32 million to personally benefit Ruderman. Because the company allegedly relied on Atlas’ false opinion letters when attracting investors, the SEC charged Atlas with aiding and abetting securities law violations. He could face civil penalties.
“Atlas disregarded his position as a gatekeeper and instead issued opinion letters containing false information, enabling 1 Global to continue its illegal offer and sale of notes to retail investors,” said Eric I. Bustillo, director of the SEC’s Miami office. “We allege that Atlas was able to profit handsomely for his role, wrongly receiving hundreds of thousands of dollars of investor money.”
To settle the SEC lawsuit, Ruderman agreed to disgorge $32 million in ill-gotten gains, pay a $15 million civil penalty, turn over $750,000 in cash and give the SEC a 50% interest in his condominium. He was also barred from working in the securities industry.
Cassel Salpeter Chairman James Cassel, who was appointed director of 1 Global’s estate in bankruptcy court, said about $100 million will be recovered to repay investors and settle lawsuits. Investors will receive about 30 cents on the dollar, he said. Any money the SEC recovers from Ruderman as part of its settlement with him would be paid to investors on top of that amount, Cassel added.
Going forward, 1 Global will pursue more litigation claims and continue to collect on its loans from businesses, said Greenberg Traurig attorney Paul Kreen, who represents the debtor.
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