Business, Local Crime

Peabody firm charged with defrauding retirees in a Ponzi scheme

A Peabody company has been charged with violating the state’s securities laws, according to Massachusetts Secretary of State William Galvin.

Thomas David Renison, Timothy James Allcott, and ARO Equity LLC are alleged to have defrauded their victims, many of them retirees, by misrepresenting themselves and the nature of the investments.

The complaint filed by the Secretary’s Securities Division, alleges investors were sold unsecured promissory notes, promising 8-12 percent in annual returns over 3-5 years.

Many investors were urged to make significant investments from their retirement savings, Galvin said. The men and their company are also alleged to have used new investor funds to make payments to existing investors.

“With little to no actual return on the fund’s business investments, monthly returns to ARO Equity investors are paid using funds raised from later investors, the classic hallmark of a Ponzi scheme,” the complaint said.

Renison has previously been charged with violations of federal law and the Maine Uniform Securities Act, due to fraudulent activity and conspiracy to commit wire fraud. He was then permanently barred from acting as an investment adviser representative by the Securities and Exchange Commission in 2014.

Despite the ban, the complaint alleges Renison solicited investments from several of his former clients on behalf of ARO Equity.

Allcott, who lists a virtual office in Boston’s Financial District, operates ARO Equity out of his mobile home in Peabody, according to the Secretary. He has collected more than $5.8 million of investor funds since 2015, less than $3 million of which was actually invested, according to the complaint.

About $2.5 million of the money raised was used to pay commissions to those charged, other fund expenses, or to make purported interest payments to earlier investors, the Secretary said.

Payments to Renison were made in the name of family members, in an attempt to conceal Renison’s involvement with the company, the complaint alleges. The majority of proceeds that were invested in two business ventures resulted in a near total loss of investor capital, the complaint said.

“This case illustrates how important it is for investors to call my office, so they can learn about who they are dealing with before they hand over their hard-earned savings,” Galvin said in a statement. “My priority is to protect all investors, in particular senior investors, from scam artists who prey on people’s retirement funds.”

The complaint seeks a cease and desist order, censure, payment of restitution to investors, and an administrative fine.

Allcott and his attorney, Kevin Kilduff, did not return calls seeking comment. Renison could not be reached for comment.

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