A Colorado Springs investment group is under investigation by the Securities and Exchange Commission for possibly defrauding investors out of more than $31 million. The 59-year-old CEO faces accusations of falsely representing his company and promising nearly a five-fold return on investments. The SEC claims that he took the money from investors and spent it on himself for high-dollar items. Several other codefendants, all from out of state, are also named in the business litigation lawsuit.
The CEO reportedly received $18 million in cash in a scam that involved mortgage-backed securities. The SEC alleges that those securities did not even exist. According to sources, the CEO has not released a comment on the case, but it was reported that he previously filed for bankruptcy in 1991 and in 2005. The SEC maintains that the scam started in 2010 and lasted for just over a year.
According to the SEC, the money may have been transferred to his wife, his son, an out-of-state lawyer and a family trust; the lawsuit named them as “relief” defendants. The money was allegedly spent on luxury items, including seven vehicles worth a total of $234,000, a recreational vehicle valued at $349,000, at least two penthouses and a condo.
When an individual faces allegations of business fraud, they face not only criminal charges but the loss of their reputation, livelihood and assets. A business litigation attorney might be able to defend clients who are accused of criminal charges in an effort to help them protect their future and their assets.
Source: Denver Post, “SEC says Colorado Springs group scammed investors out of $31 million,” David Migoya, Dec. 17, 2013
Source: Denver Business Journal, “SEC claims fraud in case against Colorado man“, December 17, 2013