ANDERSON COUNTY, S.C. (WSPA) -A Pendleton man was arrested after the SEC said he spent millions of investor dollars on luxury cars, six houses and more than $1 million in TikTok coin.
The Securities and Exchanges Commission announced Tuesday charges against Michael J. French, of Pendleton, and two companies controlled by him – MJF Holdings LLC and MJF Capital LLC – for defrauding investors and misappropriating millions in investor funds.
According to the SEC, French sold more than $20 million in high-yield promissory notes to over 400 investors across the country. The SEC said French falsely told investors the notes – which promised 12% returns for a one-year investment -were backed by a low-risk investment program, under which the note proceeds would be loaned to small businesses and/or invested in commercial loans on a fractional basis to produce returns.
He also promised not to take any payments until investors received their returns.
Those promises, the SEC said, were a sham.
Instead French is accused of using $13.2 million in proceeds to make Ponzi payments to early investors and pay for luxury and classic cars, six houses, including one house for himself and one house for his parents, a performance coach, personal trainer, personal chef and to buy $1 million in TikTok “coins” which he gave to TikTok creators.
In 2022 French reportedly began selling the houses and cars he bought after he started defaulting on interest and principal payments and could not find more investors.
French was arrested in Fort Myers, Florida, on February 28 on charges of aggravated stalking, intimidation and threatening a TikTok creator whom he’d previously given coins bought with investor money.
At the time of his arrest he was reportedly in possession of numerous forged FBI documents falsely stating he had been released from investigation.
“This case demonstrates our commitment to acting quickly to protect investors from those who violate the securities laws to enrich themselves at investors’ expense, and to preserve remaining investor assets to the greatest extent possible” said Nekia Hackworth Jones, Regional Director of the SEC’s Atlanta Regional Office. “As alleged in the complaint, Michael French swindled hundreds of investors out of over $20 million with promises of high-yield returns from a non-existent commercial loan investment business.”