The advisor was a self-proclaimed successful investor and retired businessman. He told clients that he had a Ph.D. with a concentration in business psychology. He wouldn’t just help them invest their money; he’d reveal “the hidden secrets of the wealthy elite.”
It was a compelling pitch going by the $5 million clients gave the self-styled Dr. Terrence Cash to invest in his Chairman’s Fund, which guaranteed annual returns of between 12% and 77%, according to the SEC.
Only it turned out that Dr. Cash did not have a Ph.D. He wasn’t a registered advisor. His name wasn’t Cash. And the millions of client dollars destined for the Chairman’s Fund were allegedly spent on luxury cars, jewelry and NBA tickets as part of what authorities claim was a multiyear fraud scheme.
FBI agents arrested Terrence Chalk, aka Dr. Cash, in early November.
“He concealed his criminal past, did not make the investments as promised and sent most of the money he took from his clients to a pool of money from which he spent lavishly on himself and his friends. Meanwhile, his clients were left with broken promises,” Acting Manhattan U.S. Attorney Audrey Strauss said in a statement.
Chalk’s attorneys declined to comment on the case.
If convicted on the criminal charges, Chalk faces up to 20 years in prison. It would not be the first time he was incarcerated. Chalk, 58, had already done a stint for identity theft from 2010 to 2012, according to the FBI.
Even when behind bars, Chalk did not stay out of trouble, according to the FBI and the Department of Justice. After his initial arrest, Chalk allegedly submitted “fraudulent documents to a BMW car dealership from jail in order to secure luxury automobiles for his associates,” federal prosecutors said.
‘The Greenlight life’
Three years after his release from prison, in 2015, Chalk started Greenlight, which offered wealth management and lifestyle coaching, according to authorities.
It was at this point, via coaching services and speaking at networking conferences for entrepreneurs, that Chalk allegedly dangled the “secrets” that stood between prospective clients and great riches.
Greenlight offered “transformative solutions that are non-conventional and counter-intuitive…,” the firm’s website reads. “When you learn how to apply the hidden secrets of the wealthy to your life, your dreams get new life and opportunities seem to surround you. You can finally go from struggling to thriving. This is the Greenlight life. This is life how it was meant to be lived.”
Chalk also spread the word by inviting clients and prospective clients to private dinners and corporate retreats hosted by Chalk’s Greenlight firm, according to the SEC. He allegedly told them that he had retired after selling his profitable computer company for $18 million in 2006 and went on to become a professional investor, according to the SEC, which says both assertions were false.
Prospective clients could also sign up for a free online course on wealth creation, promising to teach them the “3 key beliefs of wealth creators” and “3 secrets of wealth creation,” according to the website.
An introductory video to the course shows men and women looking concerned and frustrated as they stare at computer screens. A narrator asks: "Does today's economic turmoil make your future seem less certain?"
Chalk’s services as a “financial coach” were structured as a series of one-on-one telephone conferences with clients, costing annual fees ranging from $4,000 to $20,000, according to the SEC.
Massive penalty
In 2017, Chalk created his Chairman’s Fund, which was marketed as an “elite fund of funds,” according to the SEC. He advertised it on social media, including LinkedIn. The fund was purportedly going to generate guaranteed returns, to be paid by check on a quarterly basis, according to authorities.
Over a three-year period approximately 40 clients, several of whom were retirees, invested about $5 million in the Chairman’s Fund. Chalk allegedly told some clients to withdraw funds from retirement and pension accounts to invest in his fund, according to authorities. In one instance, an investor allegedly incurred a $130,000 penalty by withdrawing funds from a pension account; Chalk said he would make up the loss within a year by investing in the Chairman’s Fund. “In reality, the investor never made up the loss, and suffered an additional loss of over 75% of his principal investment,” the SEC says.
Chalk allegedly drew up “stock purchase agreements” for clients and his company distributed quarterly portfolio summaries, though the SEC says Chalk’s investments were not registered securities and these summaries were “misleading” because “Chalk never invested most of the investor money he and the Greenlight defendants received.”
Some of the client funds, about $1.2 million, were invested in businesses, but not ones that were successful going concerns, according to the regulator. For instance, Chalk allegedly invested $295,000 of client funds through one of his companies in a “speculative cannabinoid venture, losing most of the investment,” the SEC says.
Most of the clients’ money was allegedly used to pay back prior investors or spent on Chalk’s lifestyle, according to authorities.
He allegedly used client funds to pay for everything from his cable TV bills to big-ticket items such as installing a swimming pool at his home, jewelry, NBA tickets and a vacation to the Bahamas, according to authorities. He covered these bills “using funds from the Greenlight Advantage and Greenlight Solutions bank accounts — the same accounts to which investors sent their money to be used for investments, as Chalk and the Greenlight issuers had promised,” the SEC says.
The purported scheme began to unravel in 2019 when new investments diminished and clients started demanding their money back. Chalk “refused to take investors’ calls,” but instead sent them a letter from his company claiming their stock purchase agreements “prohibited redemptions for a period of 10 years,” according to the SEC.
The regulator says investors in the Chairman’s Fund have suffered principal losses of about $3 million, and Chalk and Greenlight “have depleted investor funds to nearly nothing.”
Dr. Cash’s “pseudonym spelled out exactly what he was after: cash, and lots of it,” said William F. Sweeney Jr., assistant director-in-charge of the FBI’s New York Office, in a statement.
