According to the Texas State Securities Board, Christopher Anthony Zaal of McKinney, Texas was arrested on Sept. 8 after being indicted in Collin County for securities fraud and money laundering.
Zaal allegedly sold $2.27 million worth of fraudulent investments to victims that included mainly teachers, administrators and other school employees, as well as retirees.
Zaal allegedly sold promissory notes and other securities without telling investors he has never been registered to sell securities or that the Texas Department of Insurance had filed to revoke his license. The insurance department later revoked his license and the decision was upheld by the Third Court of Appeals in Austin.
Some of the school employees allegedly made large withdrawals from their Teacher Retirement System pensions and made investments Zaal promised would be safe and secure sources of retirement income.
Zaal allegedly forged the signatures of two people on annuity applications he submitted to Annuity Investors Life Insurance Co. without their permission.
Zaal also allegedly committed fraud in the sale of investment contracts issued by Jerrald Green and Wealth Systems International, Ltd., and Delgreene Financial Services, L.L.C. Zaal did not tell investors he he had been sued in 2008 for fraud and breach of contract in Denton County over his sale of Delgreene investments.
Delgreene was eventually shut down by the state of Colorado. The Colorado Securities Commissioner, who accused Green and his companies of fraudulently selling securities marketed as investments in real estate notes and mortgages and consumer and commercial loans.
Zaal, who did business as Southwest Financial Group in McKinney, was named as a defendant in the civil complaint. Colorado securities regulators alleged Delgreene operated as a Ponzi scheme, using new investor funds to pay earlier investors.
Zaal also allegedly failed to tell prospective investors in Delgreene about his prior involvement in what the U.S. Attorney’s Office in Chicago described as a $500 million Ponzi scheme involving a “universal lease” investment program by Yucatan Resorts, also known as Resort Holdings International Inc.
Michael E. Kelly, president and sole shareholder of the Yucatan and Resort Holdings, was sentenced to five years in federal prison in 2012 and died the next year with other criminal charges pending.