SEC v. William R. Schantz III and Verto Capital Management LLC (ponzi schemes, 2017)

Settled

✓ Checked against the primary document on October 3, 2026. The library's summary, tags and figures for this record were compared with the regulator's own document by an AI model (Claude) following written instructions, with sampled and disputed records read a second time. No lawyer has reviewed them. A checked record can still contain errors, and checked does not mean endorsed. See how we check records or report a correction.

Report an error in this record (sec-william-r-schantz-iii-ponzi-schemes-2017) by email

In May 2017 the SEC filed and settled a New Jersey case against Verto Capital Management LLC and CEO William R. Schantz III over about $12.5 million of promissory notes, alleging Ponzi-like repayments of earlier investors. They agreed to pay $3,433,666 in disgorgement, $124,851 in interest and a $600,000 penalty.

The record

What was ordered

Civil penalty

$600k

Disgorgement

$3.4m

Prejudgment interest

$125k

Total relief

$4.2m

Alleged gain

—

A dash means the release did not state a figure we could extract, not that the figure is zero. Penalty and disgorgement are stored separately so aggregates across the library do not double-count the same dollars.

What is alleged to have happened

The complaint alleges that from November 2013 to November 2015 the defendants sold notes to fund life settlement purchases, told investors Verto was profitable and that funds were for working capital, used new money to repay earlier investors, and tapped funds for Schantz's personal use. Notes were sold largely through Texas insurance brokers to religious investors. Schantz is enjoined from selling promissory notes. A Fair Fund will return money to investors, and the settlement needs court approval.

The record held the disgorgement but not the interest or penalty.

This library tags the matter as ponzi schemes because the document describes payments to earlier participants made from later participants' money. The tagging is ours, not the regulator's: agencies charge statutory provisions, not technique names.

What technique is this, and how does it work?

This action is tagged with one technique in our taxonomy. The tagging is ours: regulators charge statutory provisions, not technique names, so the mapping is an editorial judgement described in our editorial policy.

• Ponzi schemes — see how it works, what statute it engages, and every other action tagged the same way.

Timeline

1. 2017-05-04 Litigation release published

Primary documents

Everything on this page derives from the documents below. Where our summary and the primary document disagree, the primary document is right.

• SEC litigation release

The linked release is a work of the United States government and is not subject to copyright. Our summary and narrative above are our own writing.

Related actions

Other actions in the library sharing at least one technique tag with this one.

Record added September 10, 2026. submit a correction.