David C. Coggins Sentenced for $1.3 Million Securities Fraud Scheme
On Friday, May 14, 2021, David C Coggins, 42, of Miami, was sentenced to 51 months in prison, followed by 36 months of supervised release, and ordered to pay $1,305,000 in restitution for operating an investment scheme in which he used investor funds to repay other investors and misappropriated funds for himself, including to pay for personal use, a vehicle and travel.
Coggins pleaded guilty to one count of securities fraud on March 2, 2021. According to court documents, Coggins solicited investors to his investment fund between 2015 and 2020 by touting the fund’s successful performance and total assets under management.
Over time, the fund lost money, and Coggins used money from new investors to pay other investors. Coggins also misappropriated funds for his personal purposes. To conceal the fund’s actual losses and persuade investors to part with their money, Coggins fabricated reports purportedly showing the fund’s successful performance and created a fraudulent independent auditor’s report. By the end of 2020, the net asset value of the fund was nearly zero.
Prior to his criminal Indictment on December 29, 2020, Coggins was named in an SEC Complaint on August 19, 2020.
According to the SEC, Coggins solicited more than $1.85 million from at least 10 investors starting in 2015. The SEC said that Coggin moved at least $1.6 million of the investor funds into accounts for Coral Gables Asset Holdings, which had no legitimate claim to the funds. $593,000 of the funds got returned to investors, $456,000 was misappropriated by Coggins for personal use, including for a luxury car, travel, and attorney fees for his divorce, and the rest was lost in the market.
After opening an investigation and requesting that Coggins preserve documents for review, Coggins tried to cover up parts of his fraud by destroying evidence.
On September 24, 2020, Coggins, his firm, Coral Gables Asset Management LLC, and his investment fund, operating as Coral Gables Asset Holdings, L.P., fka Coral Gables Capital, L.P., consented to the entry of a judgment that permanently enjoins them from violating the charged provisions, with monetary relief to be paid by the defendants and relief defendants to be determined by the court at a later date. On September 29, 2020, based on the permanent injunctions entered against Coggins and his offer of settlement, the Commission barred Coggins from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization.
Florida SOS records show that Jawad Addoum and Alok Kumar were involved in Coral Gables with Coggins from 2014 to 2016 but then dropped out. According to information in the court documents, $300,000 was raised from three investors before Addoum and Kumar departed. Coggins kept the scheme going for another 3 1/2 years, raising an additional $1.55 million from another seven investors. Addoum and Kumar were not charged.
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 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
101 Plaza Real South, Suite 202 North
Boca Raton, Florida 33432
Telephone: (561) 416-8956
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