McGuireWoods’ Ponzi Litigation team launched its Ponzi Perspectives blog in early 2021.  Since that time, our focus is to track key cases and decisions that have the potential to influence controlling law on Ponzi-related issues.  The blog also offers analysis on practical considerations when defending Ponzi litigation.  This 2022 mid-year round up summarizes the new

Securities and Exchange Commission v. Boron Capital, LLC et al. was filed in the Northern District Court of Texas, Lubbock Division on June 14, 2022, claiming violations of several provisions of the Securities Act and Securities Exchange Act. Specifically, the SEC seeks permanent injunctive relief against all Defendants to prevent future violations of the federal securities laws, disgorgement of any ill-gotten gains, and civil penalties.

The SEC brought this action against Boron Capital, LLC (“Boron”), BC Holdings 2017, LLC (“BC Holdings”), United BNB Fund 2018, LLC (“United”), and Blake Robert Templeton (“Templeton”) (collectively, “Defendants”).

Templeton founded Boron, a Nevada limited liability company, in order to operate a real estate business, and Templeton serves as its CEO and managing member. Templeton also controls Defendants United and BC Holdings. United is a Texas limited liability company formed by Templeton that operates as an investment fund managed by Boron. BC Holdings is a Wyoming limited liability company wholly owned by Templeton through which he offered and sold promissory notes in connection with his real estate business.  Templeton offered and sold securities to investors in three forms: (1) promissory notes issued by Defendant Boron; (2) investment units in Defendant United; and (3) promissory notes issued by Defendant BC Holdings.

Continue Reading New Complaint – SEC v. Boron Capital, LLC, et. al.

Aarus Enterprises LLC v. Burgerim Group USA, Inc. was filed in the Superior Court of California for the County of Los Angeles on February 15, 2022, seeking civil damages from a fraudulent investment scheme involving the purchase and sale of fast-food burger franchises. Specifically, the complaint alleges promissory fraud, intentional misrepresentation, and concealment.

Plaintiffs include over fifteen individuals and entities who invested in the burger franchises. The Defendants are the burger franchise Burgerim Group USA, Inc. (“Burgerim”) and unnamed individuals who participated in the scheme.

Plaintiffs contend they were presented the chance to invest in Burgerim, which represented itself as the fastest growing fast-food burger franchise.  Burgerim told investors they could purchase a franchise for $50,000, a portion of which could be financed or paid later.  Burgerim also offered to assist with real estate transactions in opening the franchise restaurants.  But Burgerim did not deliver on those promises.  Instead, it gave investors unrealistic financing options and unworkable estimates for construction timelines and costs.  Burgerim also hid from investors that it used new franchisees’ fees to repay existing franchisees and received kickbacks from vendors, real estate agents, and other representatives.

Continue Reading New Complaint – Aarus Enterprises LLC v. Burgerim Group USA, Inc.

DeCoster v. One Seven d/b/a We Are One Seven, J Wellington Financial, LLC, and Jason Jodway was filed in the Circuit Court for the County of Macomb, Michigan on January 28, 2022, seeking damages and equitable relief along with interest, costs, and attorneys’ fees for claims of negligence, breach of fiduciary duty, and negligent supervision.

Plaintiffs Michelle and Lawrence DeCoster are individuals who allegedly fell victim to a Ponzi scheme perpetrated by Heartland Group Ventures, LLC and its affiliates (“Heartland”).  Defendant Jason Jodway (“Jodway”) is alleged to have advised the Plaintiffs to invest in the scheme, and Defendants One Seven d/b/a We are One Seven (“One Seven”) and J Wellington Financial, LLC (“Wellington”) are purportedly liable for the actions of Jodway as their agent, though Jodway’s connection to Wellington is not clear.

Continue Reading New Complaint – DeCoster v. One Seven d/b/a We Are One Seven, LLC

McGuireWoods’ Ponzi Litigation team launched its Ponzi Perspectives blog in early 2021 to track key decisions and new cases in Ponzi civil and criminal litigation.  Ponzi Perspectives focuses on cases and decisions that have the potential to influence controlling law on Ponzi-related issues.  The blog also offers analysis of key decisions and practical considerations when

Securities and Exchange Commission v. BNZ One Capital, LLC, et al. was filed in the United States District Court for the Central District of California on October 28, 2021 claiming Defendants violated the antifraud provisions of the Securities Act,  the Securities Exchange Act,  and Rule 10b-5 thereunder, as well as the registration provisions of the Securities Act. The SEC also brings claims against individual Defendants Barber and Zimmerle for violations of the broker-dealer registration provisions of the Exchange Act and accuses them of being secondarily liable for BNZ’s fraud as control persons pursuant to the Exchange Act.

Continue Reading New Complaint – SEC v. BNZ One Capital, LLC, et al.

Marfleet v. Hardin, et al. was filed in the Western District of Tennessee on October 20, 2021. The complaint alleges Defendants operated a nationwide real estate Ponzi scheme that defrauded investors by falsely promising “secured” real estate investments and above-market rates of return in exchange for capital.

Plaintiff Barry Marfleet (“Plaintiff”) is an individual investor. Defendants are James Hardin and his two companies, Defendant Hardin Enterprises Inc. and Defendant MRH Holdings, LLC, (collectively “Defendants”).

Continue Reading New Complaint – Marfleet v. Hardin, et al.

Puleo, et al. v. Nelson, et al. was filed in the Central District of California on August 10, 2021, seeking damages based on more than thirty claims for violation of various state and federal securities laws, elder financial abuse, fraud, negligent misrepresentation, and conspiracy to commit fraud in connection with a real estate Ponzi scheme.

Plaintiffs are numerous individual and trustee investors who invested in student housing projects either as individuals, through their business enterprises, or as trustees of trusts.  Defendants are Nelson Partners, a California limited liability company that sponsored the offering of the real estate interests, Patrick Nelson as the sole owner, president, and chief executive officer of Nelson Partners (collectively, “Nelson Partners”), Axonic Capital LLC, a hedge fund (“Axonic”), and various other individual and corporate investment advisors and funds affiliated with Nelson Partners and Axonic.

Continue Reading New Complaint – Puleo, et al. v. Nelson, et al.

SEC v. The Estate of Kenneth J. Casey is a case filed by the SEC in the United States District Court for the Northern District of California on June 2, 2021, claiming that Kenneth Casey (“Casey”), the founder of Professional Financial Investors, Inc. (“PFI”), a real estate investment and management company, personally misappropriated over $10 million from investors as part of a scheme where Casey falsely told investors that their money would be used to invest in multi-unit residential and commercial real estate. Specifically, the complaint alleges that Casey violated 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5, and Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)].

According to the complaint, Casey’s fraudulent scheme began to unravel shortly after his death, when questions arose about the solvency of PFI and one of Casey’s other companies, PISF. The SEC had previously filed an action against the president of PFI for his role in a fraudulent scheme to misappropriate funds from investors.

Continue Reading New Complaint – SEC v. The Estate of Kenneth J. Casey