The SEC recently charged five Arizona residents with stealing millions of dollars from would-be investors who thought they were buying Mexican beachfront property when in reality they were funding a life of luxury and deceit.
“We allege that while these men were living the high life, they outright lied to investors about the uses of their funds and misled them about the safety and security of the investments and the rates and timing of their returns,” said Michele Wein Layne, Director of the SEC’s Los Angeles Regional Office. “Despite telling investors they were purchasing promissory notes from licensed brokers, none of these men were registered with the SEC to solicit investments.”
Using various methods to solicit funds from investors including advertising, investment seminars, direct mail and various other prospecting initiatives, the men misappropriated approximately 97% of the $18 million raised in the fraudulent scheme.
Appearing on an Arizona radio program called The Investment Roadshow the five men instructed listeners about how to use self-directed IRAs to invest in their companies. Those same listeners were then directed to an investment website where appointments were set up so they could work their Ponzi scheme.
The SEC’s complaint charges Jason Mogler, James Hinkeldey, Casimer Polanchek, Brian Buckley, and James Stevens with violating federal antifraud laws and related SEC rules. The SEC seeks disgorgement of ill-gotten gains plus prejudgment interest and penalties as well as permanent injunctive relief
The ringleader of the operation, James Mogler, was responsible for the lion’s share of the theft absconding with $10 million using the funds to pay for strip club outings, vacations to Hawaii and Disneyland, and such personal expenses as mortgage payments and child support.
According to the SEC, Mogler referred to the funds raised from investors as “our treasure chest” and his “personal (expletive) candy store.”