Litigation Release No. 25628 / February 1, 2023
Securities and Exchange Commission v. John Brian McLane, Jr. and Paul Anthony Nash, No. 2:20-cv-00122 (E.D. Ky. filed Aug. 31, 2020)
On February 1, 2023, the United States District Court for the Eastern District of Kentucky entered final judgments against defendants John Brian McLane, Jr. and Paul Anthony Nash, whom the SEC previously charged for their roles in orchestrating a fraudulent pyramid scheme.
The SEC’s complaint, filed on August 31, 2020, alleged that McLane and Nash owned and operated a multilevel marketing company known as Mindset 24 Global, LLC that offered personal development materials and a compensation plan that incentivized investors to recruit others into the salesforce through payment of commissions in bitcoin. The complaint also alleged that despite the promotion of Mindset 24 as a legitimate enterprise, it was nothing more than a fraudulent pyramid scheme.
McLane and Nash both consented to entry of final judgments, without admitting or denying the allegations in the complaint, permanently enjoining them from violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and the securities offering registration requirements of Section 5 of the Securities Act, and from engaging in conduct indicative of a pyramid scheme. In addition, McLane was ordered to pay disgorgement of $135,200, plus prejudgment interest of $17,770, and Nash was ordered to pay disgorgement of $173,600, plus prejudgment interest of $22,817. Both defendants also were ordered to pay civil penalties of $60,000.
The SEC’s investigation was conducted by Benjamin Perlman and supervised by Nina B. Finston and Carolyn M. Welshhans. The litigation was conducted by Patrick Costello and supervised by James Carlson.
The SEC’s Office of Investor Education and Advocacy has issued an Investor Alert to encourage investors to be aware of indications that a pyramid scheme may be posing as a multi-level marketing program.