sounds like a typical ponzi scheme.. the investors showed 1000% returns over a year! if it's too good to be true, it is. very few get 1000% within a year for accounts more than 1 million without substantial risk or precision trading.
The scam is unremarkable except for this one item. How is it possible that the private investigator didn't notice that the pool was unregistered? Isn't that the first step in performing due diligence? It sounds like maybe a scam within a scam.