A California firm is being pursued by the Securities and Exchange Commission for allegedly engaging in fraud. The SEC’s complaint accuses the management of Hoplon Financial Group, a hybrid advisory firm, of lying to investors and committing fraud in matters connected to real estate and the sale of securities.
An SEC investigation allegedly uncovered that the group and its CEO marketed memberships in a special fund that they created in order to buy, renovate and re-sell residential property. The fund, called the New Economic Opportunities Fund I, was fraudulently promoted through alleged lies and deceptions about the potential for compensation. From 2011 through 2014, the firm brought in $2.18 million and 27 investors to be part of the fund; most of the money originated from individual retirement accounts.
However, rather than using the fund for their stated purpose of buying and selling real estate, executives in the firm allegedly then used the money to spend freely on an array of business and personal expenses, the SEC claimed. Since January 2013, around $780,000 in fund money was misappropriated for various purposes, according to the complaint.
The investment firm, which was founded in 2010, had its registration revoked in 2015 after it failed to submit its yearly renewal fee for state registration. In addition, its corporate status is also suspended for failing to meet taxation requirements; it apparently has only the CEO as an employee and no assets.
People who are accused of white-collar crimes could face lawsuits as well as criminal penalties, including prison time. Defendants charged with embezzlement, tax fraud or other serious allegations could lose the ability to do business in their field. A criminal defense lawyer can help an alleged offender present a strong defense and challenge the allegations against them.