The US Securities and Exchange Commission (SEC) has announced an emergency action to freeze the assets of a Las Vegas-based firm and its sole owner charged with perpetrating a Ponzi scheme against thousands of investors living primarily in Japan.

Fujinaga and MRI falsely represented that they purchased the accounts at a discount so they could recover the full amount and turn a profit for investors. They purchased no such accounts in reality, and merely used investor money to pay the principal and interest due to earlier investors in typical Ponzi fashion. Investor funds also were used to buy luxury cars and pay Fujinaga’s credit card bills, alimony, and child support.

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George Canellos, co-director of the SEC’s division of enforcement, said: "Fujinaga deceived and exploited his Japanese investors into believing that they were buying safe investments with a steady return. Instead, Fujinaga operated a Ponzi scheme on an enormous scale that financed his own extravagant lifestyle."

The SEC’s complaint was filed under seal in US District Court for the District of Nevada two weeks ago and unsealed yesterday by the court. The Honorable James Mahan granted the SEC’s request for a temporary restraining order, asset freeze, and other emergency relief against MRI, Fujinaga, and CSA Service Center LLC, which is a company controlled by Fujinaga that is the nominal owner of homes that he occupies in Las Vegas, Beverly Hills, and Hawaii.

CSA Service Center is named as a relief defendant in the SEC’s complaint for the purposes of recovering any ill-gotten assets from the fraud that may be in its possession.

The SEC closely coordinated its investigation with the Financial Services Agency of Japan (JFSA) and the Japanese Securities and Exchange Surveillance Commission (SESC), exchanging documents and other evidence critical to the case.

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Gerald Hodgkins, associate director in the SEC’s division of enforcement, said: "Cross-border cooperation can successfully halt fraudsters who attempt to use international boundaries to avoid prosecution. The close coordination between the SEC and Japanese regulators was critical to freezing Fujinaga’s assets and foiling his scheme."

The SEC’s complaint charges Fujinaga and MRI with violations of the antifraud provisions of the federal securities laws, and the SEC seeks disgorgement of ill-gotten gains, financial penalties, permanent injunctions, and other emergency relief.

The SEC’s investigation, which is continuing, has been conducted by Danette Edwards and Thomas Swiers and supervised by Gregory Faragasso.