The SEC Charges Arizona Players with Embezzlement

Securities Fraud SEC EnforcementThe Securities and Exchange Commission (SEC) charged five Arizona residents with embezzlement. Allegedly, these residents stole millions of dollars from investors to make car payments, buy clothes, and fund travel and entertainment at luxury resorts, casinos, and strip clubs.

The SEC claims that Jason Mogler, James Hinkeldey, Casimer Polanchek, Brian Buckley and James Stevens embezzled roughly 97% of the $18 million they raised from 225 investors who were told the funds would be used to obtain and develop beachfront property in Mexico as well as to run recycling facilities and to buy foreclosed residential properties for resale. They repeatedly lied about the purported progress of the investments to calm worried investors as time extended past when their promissory notes should have been repaid. In certain instances they made Ponzi-like payments to investors, threatening them with lawsuits by using money from new investors, which Mogler termed “robbing Peter to pay Paul.”

According to the SEC’s complaint filed in U.S. District Court for the District of Arizona:

  • The five men solicited and lured prospective investors through radio, magazine, and Internet ads as well as marketing materials, cold calls, and investor presentations.
  • Polanchek in particular was known to solicit potential investors at such venues as bars, cruises, and self-help seminars.
  • The men also participated in an Arizona radio program called The Investment Roadshow during which they instructed listeners about how to use self-directed IRAs to invest in their companies.
  • They steered listeners and other prospective investors to an Arizona Investment Center website they created for investors to schedule appointments or sign up for seminars or webinars to learn more about their investment opportunities.
  • Mogler was described as the “Master Investor” on the Arizona Investment Center website and he orchestrated and perpetuated the fraudulent offerings. He stole almost $10 million in investor funds for strip club outings, vacations to Hawaii and Disneyland, and such personal expenses as mortgage payments and child support.
  • Polanchek stole approximately $2 million, Hinkeldey stole $900,000, Buckley stole $500,000, and Stevens stole $200,000.
  • Mogler candidly called investor funds “our treasure chest” and his “personal (expletive) candy store.”

Because of their embezzlement, The SEC’s complaint charges Mogler, Hinkeldey, Polanchek, Buckley, and Stevens with violating federal antifraud laws and related SEC rules. The SEC seeks disgorgement of illicit earnings plus prejudgment interest and penalties as well as permanent injunctive relief.

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.

Hamilton & Associates | Securities Lawyers
Brenda Hamilton, Securities Attorney
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Boca Raton, Florida 33432
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www.SecuritiesLawyer101.com