How a Fake Global Finance Firm and a Crooked Hedge Fund Stole $26 Million from Ordinary Normies

The Non-Financial Ledger: What Was Actually Stolen

The number that keeps getting cited in this case is “only” $26 million. But that figure completely fails to capture what actually happened to the people on the other end of these agreements.

Think about what it takes to wire $700,000, or $1 million, or $20 million to a stranger. You do that because someone sat across from you — or called you on the phone — and made you believe they were professionals. That they had expertise you didn’t. That they had access you didn’t. That your money was going somewhere specific, guarded by lawyers and escrow accounts and contracts with official-sounding names. You handed over the kind of money that represents years of work, a business you built, a family’s financial cushion, and you did it because you were deliberately made to feel lucky to have the opportunity.

The Reign Defendants knew their COO had a federal bank fraud conviction on his record. They knew Reign had never once placed a single investor in a successful program. They knew Allen had already failed to return money to the earlier investors when they recruited the next one. None of that information ever reached the people writing the checks.

Instead, investors received fake excuse letters on Compass letterhead, signed by Patrick Allen, drafted by Gary Mills, explaining that the banks were “backed up partially due to bankers not working full time.” They received emails from Giorgio Johnson’s and Mills’ accounts telling them everything was on track. When Investor B hired a lawyer and threatened to go to the SEC, Reign passed back Allen’s message that the credit line release was coming “before the new year.” It never came.

For Investor C, the $20 million was supposed to sit untouched. Stone put it in writing. Mills put it in writing. The Trade Agreement put it in writing. Within 24 hours of the wire arriving, $6 million was already moving toward a separate loan venture that Investor C had explicitly forbidden. The Berone principals spent the rest on themselves. By the time Investor C asked for their money back, it was already gone — and the people holding it told them they were “beginning the process of unwinding everything.”

What was stolen was not just money. It was the ability to trust a contract. To trust a signature. To trust someone who presents themselves as a financial professional. That kind of betrayal has no line item in the complaint.

Legal Receipts: What the Complaint Actually Says

• This is the SEC’s foundational charge: the investment programs were not real. There was nothing to invest in, no platform to trade on, no European bank executing leveraged transactions. The entire enterprise was a fiction.
• The SEC is not alleging that the programs failed or underperformed. It is alleging they never existed at all.

• The complaint establishes that every element of Reign’s professional presentation — the global offices, the seasoned professionals, the trade platforms, the crafted financial strategies — was fabricated for the website.
• A firm with no bank account was collecting millions of dollars from investors on the premise of managing those funds professionally.

• The “Know Your Customer” package used social pressure to prevent investors from doing their own research or consulting outside advisers. Framing basic due diligence questions as evidence of an “arrogant personality” is a documented fraud technique for silencing skepticism.
• Threatening “instant cancellation” for discussing the investment with others ensured no investor could compare notes with another investor already being defrauded.

• When Investor B directly asked how an “unbelievable return” on $1 million was possible, Mills refused to explain the mechanism and deflected with an appeal to authority.
• This statement was made by the Chief Operating Officer of a firm that, per the complaint, had never placed any investor in a successful program and whose due diligence consisted of an internet search.

• The complaint establishes that Berone Capital’s principals used investor funds — specifically Investor C’s $20 million — for personal luxury purchases within days of the wire arriving.
• The memo line referencing a “Rolls Royce” is documented in the complaint as a transaction traceable directly to Investor C’s funds.

• The complaint establishes that Berone Capital was founded with approximately $350,000 in “gifts” from Patrick Allen — money that came, at least in part, from the Compass Program investors Allen had already defrauded.
• The SEC’s use of the word “selfishly” appears to be drawn from Berone’s own characterization, establishing that Berone’s principals themselves acknowledged the conduct.

Public Deception: The Gap Between the Pitch and the Reality

The Reign Defendants made specific, documented representations to investors that the complaint establishes were false at the time they were made.

• Claimed: Reign was “a global financial services firm run by seasoned professionals with exceptional relevant experience.” Reality: Johnson and Mills had no meaningful experience in the financial products they sold. Mills had a federal bank fraud conviction. Reign had never placed a single investor in a successful program.
• Claimed: The investments were “highly regulated” with involvement from “U.S. Federal Regulatory Authorities, Western European Central Banks program management, licensed traders and trading banks” and would be “registered with a major world bank and/or the Federal Reserve.” Reality: The programs were not regulated. Allen and the Reign Defendants were not licensed. The investments were registered with nobody.
• Claimed: Investor funds would be kept “secure” and “will not, for any reason, invade, deplete, move or transfer any of the funds.” Reality: Allen spent Compass Program funds on exotic cars, college tuition for relatives, and personal investments. Investor B’s $1 million funded Allen’s personal subscription to the Berone Fund. Investor C’s $20 million was wired to an unauthorized loan venture within one day.
• Claimed: Reign had a “good track record and successful working relationship with Allen” (told to subsequent investors even after earlier investors hadn’t been paid). Reality: At the time Mills made this representation in July 2021, at least one investor still had not received any money back from the Compass Program.
• Claimed (November 30, 2022): Mills told Investor C that the contract with the trading platform had been signed. Reality: The Reign Defendants never sought to open an account with BNP Paribas and never negotiated or signed any contract with any platform. $11.9 million of Investor C’s funds had already been diverted.

Profit-Maximization at All Costs

The defendants did not stumble into fraud. The complaint documents deliberate financial choices that show money extraction was the priority at every stage, including when that required lying to, and continuing to exploit, investors who were already owed money.

• The Reign Defendants accepted $260,000 in payments from Allen between July and October 2021, even though the Trade Agreements and JVAs explicitly stated Reign would receive no compensation until the Compass Program generated trading profits. No profits were ever generated. The payments were funded at least in part by Compass investor funds. The Reign Defendants did not disclose these payments to investors.
• When Allen’s Compass Program failed to perform, rather than stopping, the Reign Defendants recruited Investor B into the PBL & 5Js Program for $1 million — without disclosing that many Compass investors had still not received their principal back and none had received profits.
• When both of Allen’s programs failed, the Reign Defendants launched their own program — the Reign Program — and secured a $20 million investment from Investor C, promising a 300% monthly return, despite having no platform, no traders, no relationship with BNP Paribas, and no basis for any of the promises made.
• Within one day of Investor C’s $20 million arriving, the Reign Defendants caused $6 million to be transferred on October 27 and $5.9 million on November 9 — totaling $11.9 million — to fund a short-term loan venture through an escrow attorney Investor C had explicitly prohibited from accessing their funds.
• Reign received approximately $1.017 million in “commission” from that unauthorized loan venture, some of which was distributed to Johnson and Mills directly.
• The Berone Defendants moved $3.4 million from the Berone Fund’s brokerage account within days of Investor C’s wire. Of that, $850,000 was used to purchase corporate bonds naming Beguesse and Stone themselves as beneficiaries. Additional funds went to luxury cars including a Rolls Royce, private jets, jewelry, and Atlanta Hawks tickets. Another $30,000 was sent to Beguesse’s girlfriend to purchase a car.

How Capitalism Exploits Delay: Time as a Corporate Weapon

Delay was not a side effect of this scheme — it was a core operating mechanism. The defendants used manufactured excuses to buy time to recruit the next victim while the current victims waited for money that was already gone.

• When Allen missed his first deadline for returning Compass Program principal, the Reign Defendants and Allen began issuing a documented series of excuse letters. A May 2021 letter blamed “an unforeseen accounting error.” A letter from early September 2021 blamed bank staffing. A February 2022 letter blamed a brokerage account transfer. These letters were drafted by Mills, placed on Compass letterhead, signed by Allen, and emailed to investors — all while Allen had already spent the money.
• The non-disclosure requirements built into the KYC packages and Trade Agreements were weaponized as a delay tool: investors could not contact Allen directly (purportedly because of NDAs), so all communications were filtered through the Reign Defendants, who relayed Allen’s self-serving excuses without independent verification.
• Despite the Compass Program’s complete failure to perform, the Reign Defendants continued recruiting investors for PBL & 5Js in April 2022 and for the Reign Program as late as September/October 2022 — more than a year after the first investors were owed money.
• When Investor C demanded a return of the $20 million in January 2023, Mills told Investor C they would “begin the process of unwinding everything” — a statement made when $11.9 million had already been transferred out and the Berone Defendants had spent millions more. There was nothing to unwind.
• On September 6, 2022 and again on September 16, 2022, the Reign Defendants relayed Allen’s promises to Investor B’s counsel that funds were being liquidated and would arrive “any day now.” Investor B never received a return of the $1 million principal. Investor B never received any profits.

The Contractor Shield: How Corporate Structure Diffused Liability

The scheme was deliberately structured through a layered network of entities — Reign, Allen’s companies, and the Berone Fund — so that each party could claim it was relying on someone else, while investors had no clear line of sight to anyone who was actually accountable.

• Reign positioned itself as a “middleman” responsible only for identifying investment opportunities and facilitating paperwork. The JVAs gave Reign authority to enter investment structures on behalf of investors while simultaneously disclaiming responsibility for what the program administrators actually did with the money. This structure gave Reign a cut of the profits (20% under the agreements) while insulating it from the operational fraud Allen was committing.
• Allen operated through Compass Fuel & Oil, Inc.; Compass Fuel & Oil Ltd.; and PBL & 5Js Holdings, Inc. — all now dissolved, none ever registered with the SEC. Using multiple corporate shells meant that when investors complained, there was no persistent entity with assets to pursue. All three companies were dissolved before the SEC filed this complaint.
• Confidentiality and non-circumvention clauses in the Trade Agreements explicitly prohibited investors from having direct contact with Allen or Compass. The Reign Defendants told investors this was required by NDAs with Compass. In practice, it meant investors could never independently verify what Allen was doing with their funds and were entirely dependent on Reign — which was relaying Allen’s fabricated excuses without verification.
• For the PBL & 5Js and Reign Programs, investor funds were held in the Berone Fund rather than sent directly to Allen or Reign. This was presented to investors as a protection measure — funds at “arm’s length” from Allen. In reality, the Berone Defendants had a pre-existing personal and financial relationship with Allen (Beguesse was Allen’s former financial adviser; Allen had given Berone $350,000 to get started) and allowed Allen to direct transfers out of the fund at will.

Societal Impact Mapping

Public Health and Psychological Impact

Fraud of this scale and duration causes documented harm to individuals that extends beyond financial loss.

• At least 31 investors were defrauded across three programs over approximately 19 months. Individual investments ranged from approximately $50,000 to $20 million, meaning the scheme targeted people with meaningful assets — not just sophisticated institutional money — who were relying on the security guarantees the defendants made.
• The complaint documents that investors who raised complaints were told to stop asking questions, that their “arrogant personality” would get them rejected, and that confidentiality requirements prevented them from independently verifying anything. This isolation technique is documented in the research on financial fraud as a primary driver of prolonged psychological distress in victims.
• Investor B hired legal counsel and sent a formal demand letter before the SEC was contacted. By that point, the money had already been spent. The documented period during which investors were actively lied to while their funds were being consumed spans from at least mid-2021 through early 2023.

Economic Inequality

High-yield investment program fraud disproportionately exploits the gap between the promise of financial mobility and the reality of unequal access to legitimate high-return investment vehicles.

• HYIPs specifically target people who are wealthy enough to have capital but not wealthy enough to access institutional-grade investment due diligence and legal protections. The scheme’s promise of “exclusive” access to private placements unavailable to most people exploited aspirational positioning directly.
• The Compass Program investors collectively lost approximately $5.8 million — investing $7.1 million and recovering only $1.3 million. The single investor in PBL & 5Js lost the entire $1 million principal. Investor C lost approximately $18.1 million of the $20 million invested (recovering only $1.865 million in October 2023, more than a year after the fraud became undeniable).
• Early Compass Program investors who did receive a partial return of principal were paid, at least in part, with subsequent investors’ money — a Ponzi-like structure that temporarily protected earlier investors while deepening the losses of those who came later.
• Patrick Allen’s documented personal spending of investor funds included donations to institutions of higher education and tuition payments for relatives and friends — a documented transfer of wealth from investors to third parties with no connection to the investment agreement.