John Williams Charged with Conducting Misappropriation Scheme and Offering Fraud

SEC Defense Attorneys - Insider TradingOn October 20, 2015, the Securities and Exchange Commission (SEC) charged John Clifford Williams with his involvement in a misappropriation scheme. The complaint alleges that Williams misappropriated and diverted more than $3.1 million illicit funds that he accumulated from an investor in the course of securities offerings. According to the complaint, Williams took advantage of the investor’s trust and repeatedly solicited and gained illicit earnings that were based on the implication that the money would be used only for specific investments.

The SEC’s allegation states that between February 2009 and May 2014, Williams raised more than $8.1 million from the investor, including at least $2.6 million for Energy Operations Trust (“Energy Operations”), which Williams established to offer revenues derived from gold and manganese mines located in Central America, and $5.5 million for American Hydraulic Power, LLC (“AHP”), which Williams founded to develop and commercialize an energy efficient technology licensed from the U.S. Environmental Protection Agency. According to the complaint, Williams also raised smaller amounts from the investor to develop an island off of the coast of Panama and to secure control of a large foreign bank account to provide additional funding for AHP.

The SEC claims that Williams failed to disclose to the investor that he had misappropriated and diverted over $3.1 million, more than 38%, of the total funds he had raised from the investor. According to the complaint, among other things, Williams used these funds to pay numerous personal expenses. The SEC also claims that Williams diverted investor funds to pay for domestic and international travel, including first class flights and luxury accommodations, and to fund other projects that were not authorized by the investor.

The SEC’s complaint charges Williams with violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC seeks a permanent injunction, disgorgement with prejudgment interest, and civil penalties against Williams.

For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956, by email at [email protected] or visit www.securitieslawyer101.com.   This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute, legal and compliance advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.

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Brenda Hamilton, Securities Attorney
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