Air Force Academy cadets caught up in Ponzi scheme, SEC says

Julia LeDoux
September 23, 2020 - 9:59 am
Air Force Academy

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The Securities and Exchange Commission has settled charges in the case of a Colorado man who allegedly defrauded investors, including cadets at the U.S. Air Force Academy, in a Ponzi-like scheme.

The SEC’s complaint alleges that over a two-year period, Milton J. Dosal, Jr. raised nearly $100,000 from approximately 41 investors under the guise that he would day-trade stocks on their behalf.

“As alleged in our complaint, Dosal enticed military service members and others to invest with false claims that he was a highly successful day-trader,” said Regional Director for the SEC’s Regional Denver Office Kurt Gottschall. “The SEC will continue to vigilantly pursue fraudsters who prey upon those who serve our nation.”

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According to a release, Dosal is a car enthusiast who met a number of investors through car club events, including an Air Force Academy cadet who Dosal then used to gain access to other cadets. The complaint alleges that Dosal falsely portrayed himself to be a securities professional and misled investors about his trading activity and their investment returns.

The complaint further alleges that Dosal falsely advised investors that they could, with little risk, expect weekly returns of up to 10%. Dosal also allegedly used fake stockbroker agreements and false account balances for some investors

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The complaint alleges that Dosal used investor funds for personal expenses and diverted new investor funds to pay back prior investors, in a Ponzi-scheme fashion.

Without admitting or denying the allegations in the SEC’s complaint, Dosal consented to the entry of a final judgment permanently enjoining him from violating the antifraud and broker-dealer registration provisions of the federal securities laws.

He also agreed to return $51,633 of allegedly ill-gotten gains plus prejudgment interest of $3,503 and to pay a $51,633 civil penalty.

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