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.

Oregon JV LLC v. Advanced Investment et al. was filed in the United States District Court for the District of Oregon on March 2, 2022. Plaintiff asserts claims sounding in fraud and requests compensatory and equitable relief against a construction lender and other individuals and entities that funded various loans to a homebuilder with a history of fraud and embezzlement.

Plaintiff is a company that managed a construction loan pool for non-party Joseph Russi.  Defendant Advanced Investment Corp (“AIC”) is an Oregon-based corporation that previously managed the loan pool at issue. The remaining Defendants consist of trustees of various trusts, Oregon-based financial institutions, and several Oregon residents, all of which were investors in the subject loan pool (the “Defendant Lenders”).

Continue Reading New Complaint – Oregon JV LLC v. Advanced Investment 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.

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.

Fatime Abdel-Fakhara, et. al. v. The State of Vermont, et. al., was filed in the United States District Court for the District of Vermont on August 24, 2021 by investors claiming that the State of Vermont and several individual Defendants wrongfully solicited and used investor funds to complete the last two phases of a Vermont ski resort after they had knowledge that the first six phases were funded through a Ponzi scheme. The complaint alleges claims for: (1) civil conspiracy under 42 U.S.C. § 1983; (2) constitutional taking without just compensation against the State of Vermont; (3) constitutional taking with no Due Process against the State of Vermont; and (4) gross negligence against the individual defendants.

Continue Reading New Complaint – Fatime Abdel-Fakhara v. The State of Vermont

Mills v. Trustmark National Bank, et al. was filed in the Southern District of Mississippi on August 19, 2021 by a receiver appointed on behalf of companies engaged in a scheme to defraud investors by producing false deeds for the purchase and sale of timber.

Plaintiff Alysson Mills (“Plaintiff”) is the Receiver for Arthur Adams (“Adams”) and his company turned Ponzi scheme Madison Timber Properties, LLC (“Madison Timber”).  The defendants are Trustmark Corporation d/b/a Trustmark National Bank (“Trustmark”), Southern Bancorp Bank (“Southern”), Riverhills Bank (“Riverhills”), Bennie Butts (“Butts”), and Jud Watkins (“Watkins”) (collectively, “Defendants”).  Butts and Watkins were employees of Trustmark and Riverhills during the alleged Ponzi scheme.

Continue Reading New Complaint – Mills v. Trustmark National Bank, et al.