Litigation Releases (Justin R. Kimbrough and Prosperity Consultants, LLC)

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 26402 / September 17, 2025

Securities and Exchange Commission v. Justin R. Kimbrough, et al.

, 4:22-cv-00558 (E.D. Tex. (Sherman Division) filed July 1, 2022)

SEC Obtains Final Consent Judgments Against Defendants in Multi-Million Dollar Ponzi Scheme

On August 5, 2025, the Securities and Exchange Commission obtained final consent judgments against Justin R. Kimbrough and an entity that he controlled, Prosperity Consultants, LLC, stemming from their involvement in a Ponzi scheme that raised at least $3 million from at least 31 investors. The civil action remains pending against Kimbrough's and Prosperity's co-defendants, Terry Nikopoulos and four entities that Nikopoulos controlled.

The SEC's complaint, filed on July 1, 2022, alleged that from June 2020 through at least April 2021, Kimbrough and Nikopoulos told potential investors that investors' funds would finance a real estate wholesale business and the purchase of medical products for resale by a company in India. As alleged, however, rather than using investors' money to finance the two purported businesses, Kimbrough and Nikopoulos retained at least $1.75 million for themselves and paid approximately $1.05 million to existing investors as purported "dividend" or "interest" payments in furtherance of the Ponzi scheme.

Kimbrough and Prosperity consented to the entry of respective final judgments that permanently enjoin each of them from violating the antifraud provisions of Sections 17(a)(1) and (3) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rules 10b-5(a) and (c) thereunder. The final judgment against Kimbrough also permanently enjoins him from violating the securities registration provisions of Sections 5(a) and 5(c) of the Securities Act, the broker-dealer registration provisions of Section 15(a)(1) of the Exchange Act, and the antifraud provisions of Section 17(a)(2) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5(b) thereunder. The final judgment against Kimbrough further imposes an officer and director bar and includes a conduct-based injunction that prohibits him from participating in the issuance, purchase, offer, or sale of any security, other than on a national securities exchange for his own personal account. The final consent judgments entered against Kimbrough and Prosperity order them to pay jointly and severally disgorgement of $1,137,437.45 plus prejudgment interest of $86,882.82 thereon, with these amounts deemed satisfied by entry of a forfeiture order in the amount of $2,560,938.87 against Kimbrough in a parallel criminal proceeding.

The SEC's litigation is being led by John Timmer under the supervision of James Carlson. The investigation was conducted by John J. Dempsey and Ryan Farney under the supervision of Nina B. Finston and Michael Brennan.