Securities Arbitration Lawyers BlogFive Arizona Residents Charged By SEC for Stealing From Investors
According to one accused, they “robbed Peter to pay Paul” while living the high life
Living the high life has come to an end for five Arizona who were charged with stealing millions from investors by the SEC. According to the SEC release on September 11, the participants allegedly used stolen funds to make car payments, buy clothes and fund travel and entertainment at luxury resorts, casinos and strip clubs.
It is alleged that the five individuals—Jason Mogler, James Hinkeldey, Casimer Polanchek, Brian Buckley and James Stevens—raised close to $18 million from 225 investors who believed the group was acquiring and developing beachfront property in Mexico, as well as operating recycling facilities and purchasing foreclosed residential properties for resale. They told investors they were buying promissory notes from licensed brokers, however, none of the accused were registered with the SEC to solicit investments, according to Michele Wein Layne, Director of the SEC’s Los Angeles Regional Office.
Instead of investing the funds as promised, the men are accused of using the money as their own “treasure chest” for outings to strip clubs, vacations to Hawaii and Disneyland, to make mortgage and child support payments as well as other personal gains. To calm worried investors as promissory note repayment deadlines passed, the men allegedly made Ponzi-like payments to investors threatening lawsuits using money from new investors.
How did these five men lure new investors into their scheme? According to the SEC complaint, the defendants used numerous entities that they controlled to solicit funds from new investors using radio, magazine and internet ads, as well as marketing materials, cold calls and investor presentations. Some of the entities named in the complaint include:
- Pangea Investment Group LLC
- Arizona Investment Center
- Tri-Core Business Development LLC
- Tri-Core Mexico LLC
- Phoenix Premium Properties LLC
- Mar De Cortez Construction Company
- ERC Compactors LLC
- ERC of Chicago LLC
As a result, Mogler, Hinkeldey, Polanchek, Buckley and Stevens are all charged with violating federal antifraud laws and related SEC rules, according to the release. The SEC is seeking disgorgements of ill-gotten gains plus prejudgment interest and penalties and permanent injunctive relief. Unfortunately, real estate schemes remain prevalent and unscrupulous advisors claim these investments are illiquid while they spend investor’s money.
If you or someone you know believes that they have suffered financial loss as the result of actions by Mogler, Hinkeldey, Polanchek Buckley, Stevens, or any of the entities listed above contact Silver Law Group today as you may be entitled to some measures of recovery through securities arbitration.