A Foster City man who faces criminal charges in state court for an alleged ATM investment scheme was sued by the U.S. Securities and Exchange Commission today in a related civil lawsuit in federal court in San Francisco.
Michael Ferguson, 44, is accused in the lawsuit of fraudulently obtaining more than $12 million from 160 people who invested between 2005 and 2013 in a business that operated private automated teller machines in shopping malls around the country.
Separately, Ferguson was charged by the Santa Clara County District Attorney’s Office in March with nine criminal felonies, including securities fraud, burglary and grand theft.
He was recently freed from jail while awaiting trial on those charges, according to the SEC.
The SEC’s civil lawsuit names both Ferguson and his company, Transactions Unlimited, as defendants. The company operated under the name of ATM Plus and was based in San Francisco.
The lawsuit alleges that Ferguson ran the business as a so-called Ponzi scheme, in which investors were paid with funds from new investors even after company earnings dried up in 2011.
The lawsuit says that investors eventually received back about $10 million of their funds and alleges that Ferguson pocketed about $900,000 from the business.
SEC attorney Robert Durham said investors are believed to have lost about $2 million, but said that under federal law, Ferguson could be liable for the entire $12 million gained from the alleged fraud.
The lawsuit alleges Ferguson made false and misleading statements to investors and fabricated account statements. He is also accused of showing one investor a forged contract that allegedly falsely showed that ATM Plus had recently purchased 22 ATMs.
Many of the investors were from the Bay Area, the SEC said.
The lawsuit ask for court orders requiring Ferguson to cease the alleged violations of securities law, to forfeit his alleged ill-gotten gains and to pay civil penalties.
No court dates have been set thus far in the case.
Julia Cheever, Bay City News