Massachusetts Secretary of State William F. Galvin on Wednesday filed civil fraud charges against EmGoldex Team USA Inc. and four principals, alleging that the Andover group was running a pyramid scheme.
According to an administrative complaint filed with the state, EmGoldex has lured hundreds of Massachusetts investors to its online store to buy and sell gold bars. According to Galvin’s office, the company has “no discernible retail sales activity and relies on new investor funds as its primary source of income.”
EmGoldex is purportedly registered in the Seychelles, according to Galvin’s complaint, an island nation off Africa. EmGoldex also lists company addresses in Amsterdam and Dubai.
John Sten, a Boston lawyer representing the company, said he was reviewing the complaint. He said the Andover group was not affiliated with an overseas outfit called EmGoldex.
As of July, $473,000 had been deposited in Team USA bank accounts, according to the complaint, and $282,659 had been wired to EmGoldex financial institutions overseas.
In a four-month period from March 2014 through mid-July 2014, the company had facilitated more than 370 investments in the EmGoldex scheme, according to the complaint.
The company offered participants “unlimited income,’’ promising profits in excess of 1,105 percent.
The Globe reported in August that the company was under investigation.
Galvin, in a statement, said his office “moved to halt this scheme in Massachusetts before it entraps more investors.”Beth Healy can be reached at firstname.lastname@example.org. Follow her on Twitter @HealyBeth.