LOS ANGELES – The U.S. Securities and Exchange Commission has alleged that Edwin Fujinaga, owner of Las Vegas-based MRI International Inc., has moved personal assets out of the United States in violation of a court-ordered asset freeze.
In a recent memorandum to the U.S. District Court of Nevada, the SEC said Fujinaga, charged with operating a Ponzi scheme that bilked over $800 million from Japanese investors, failed to provide documents reflecting his finances before and after the asset freeze order on Sept. 12.
“Meanwhile, it is fair to infer . . . that the defendants (including Fujinaga) have used this time to violate provisions of the asset freeze and probably to remove funds from easily detected domestic bank accounts,” the SEC said.
The commission is asking the court to order Fujinaga to surrender his passport because his failure to provide financial records indicates “that it is highly likely Fujinaga will be tempted to use his hidden resources to leave the country and the reach of this Court and the SEC.”
Fujinaga provided the SEC with his 2012 federal income tax return and other personal financial records, as well as a personal checking account record for 2011 and 2012.
However, the SEC said a $1.3 million discrepancy between his 2012 income and the total in the checking accounts has been left unexplained.
The commission is also asking the court to order Fujinaga to provide records of income and expenditures since Sept. 12 to prove compliance with the asset freeze and comply with an Oct. 7 preliminary injunction ordering an accounting of assets.
Should the court make such an order, failure to comply could result in daily fines and even imprisonment for Fujinaga.
Since 1998, MRI purportedly offered Japanese investors the opportunity to invest in medical account receivables in the United States.
In its lawsuit filed last September, the SEC charged MRI and Fujinaga with breaking the 1933 securities law and 1934 securities exchange law by making false representations to investors and by using investor money to pay earlier investors whose contracts had matured.
The SEC also alleges Fujinaga transferred investor money to MRI operating accounts and other Fujinaga-controlled entities.