US Funding Corporation, a factoring company based in Hackensack, New Jersey, defended itself on Tuesday against accusations of fraud made by the federal Securities and Exchange Commission.
The company, U.S. Funding Corporation, was accused by the SEC of fraudulently promising investors returns of 20% to 25%.
But Leonard M. Satisky, the company's senior vice president, said U.S. Funding will be able to pay those returns to its 83 investors through its factoring business, buying accounts receivable in the garment and construction industry.
"If you take our business model out two years, there is enough revenue to pay the investors" and run the business, Satisky said.
The SEC also accused U.S. Funding's president, Angelica Gwinnett, of siphoning US$300,000 for her own use and spending US$75,000 for a trip to Las Vegas.