The youngest black CEO of a publically traded company who once labeled himself the “social capitalist” is now being charged with fraud for running an $11 million Ponzi scheme, largely at the expense of black churchgoers.
Ephren W. Taylor II, who, in an interview with NPR in 2007 said his company City Capital was “so much more than just the money” and was about “social and economic purpose,” is being accused by the Securities and Exchange Commission for swindling his investors in two ways.
And now, the once bright CEO is no where to be found, according to the SEC.
The government regulatory claims he told his investors their money would be used to support small, locale businesses to revitalize the community. They didn’t (allegedly). Second, he sold “sweepstakes machines” which he claimed would return at 300% in the first year. They didn’t. To top it all off, the SEC reports Taylor encouraged his investors “to roll-over retirement portfolios to self-directed IRA custodial accounts, which he facilitated, and then invest those funds with Taylor and City Capital.”
So where did all the money go? Well, it turns out Mr. Taylor was trying to build his family up into a media empire. He allegedly used the cash to self-publish and market books, pay for his wife’s singing career, pay rent and hire public image consultants.
I don’t think any public image consultant would be tricky enough to help him now.
Even those businesses that Taylor did take over didn’t fair much better. As the SEC says, “The businesses typically floundered – or outright failed, as in the case of City Juice – as soon as City Capital acquired them. In fact, City Capital sold one laundry back to the original owner just one month after selling City Laundry promissory notes to a Houston investor.
And of course, none of this was disclosed to investors. Who, I might add, were rarely paid. Taylor encouraged them to roll their notes over for another year promising a higher rate of return, promoting the “great things” he was doing with their money.
If any investor was smart enough to see through this, they were “subjected to an endless cycle of unreturned phone calls and emails, empty promises of imminent action, and claims that the investor had in fact already agreed to roll over his note.”
Is this the same man who, only five years ago, explained to NPR about how “moral” his company was?
“That’s why we don’t own bars or clubs or things like that,” he said. “It doesn’t go along with our moral and ethics compass that we have at the company.”
Taylor also explained that he’s a minister (!), and because of that he worked with churches and their individual members to raise funds for his work supposedly raising up the urban community.
Clearly, he left Commandments Eight and Nine out of his religious repertoire.
For those interested, here is a video of the now debunked preacher doing some preaching