Judge Freezes InverWorld’s Assets

A judge in San Antonio froze the assets of investment firm InverWorld Inc. after federal overseers charged that its top executives bilked 1,000 Mexican investors out of $475 million. FBI agents searched InverWorld’s San Antonio headquarters for documents that angry investors hope will shed light on where their money went. The Securities and Exchange Commission sought the asset freeze in a civil lawsuit that accused InverWorld Chairman Jose Zollino and President George Fahey of securities fraud. The SEC said InverWorld made unauthorized, highly risky investments and bought worthless securities issued by an affiliated shell company, then sent fraudulent monthly statements to hide the transactions. Wire transfer records indicated the company sent $210 million to bank accounts in Switzerland and the Bahamas, the SEC said. U.S. District Judge Fred Biery also ordered Zollino and Fahey to repatriate any assets shipped abroad and to give a full accounting of their holdings. The SEC said InverWorld investors, most of them wealthy Mexicans, sent their money to the company seeking low-risk investments outside of Latin America. Zollino has said in recent court appearances that he and Fahey are guilty of making bad investments, not of fraud.