SEC Charges Indianapolis Investment Advisor, Veros Partners, With Fraud. Veros had hundreds of dental clients

The Securities and Exchange Commission (“SEC”) announced charges against an Indianapolis investment adviser, its president, two associates and several affiliated companies for engaging in two fraudulent farm loan offerings, in which they made Ponzi scheme payments to investors in other offerings and paid themselves hundreds of thousands of dollars in undisclosed fees. The SEC obtained a temporary restraining order and emergency asset freeze to halt the scheme.

According to the SEC Complaint, Defendants Veros Partners, Inc. and Matthew D. Haab, its president, along with Jeffrey Risinger and Tobin Senefeld have fraudulently raised at least $15 million from at least 80 investors. The Complaint alleges that Veros and Haab raised those funds, mostly from Veros’ own clients, in two separate farm loan offerings. The investors in the 2013 and 2014 Offerings were informed, orally and in writing by Haab, and in the written offering documents, that investor funds would be used to make short term operating loans to farmers for the 2013 and 2014 growing seasons.

Contrary to these representations, the Complaint alleges that although some investor money was loaned to the farms, significant portions of the loan proceeds were not used for current farming operations but were used to cover the farms’ prior, unpaid debt.  In addition, Haab, Risinger, and Senefeld allegedly used money from the 2013 and 2014 Offerings to make at least $7 million in payments to investors in other offerings and to pay themselves over $800,000 in undisclosed “success” and “interest rate spread” fees. According to the Complaint, they also repeatedly misled investors about the risks, nature, and performance of the investments and underlying farm loans. To date, less than $5 million of the approximately $12 million in loans owed in connection with the 2014 Offering have been repaid. All but one of the loans in the 2014 Offering are past due and, according to the Defendants, the loans, most of which included unpaid balances from prior years, will not be repaid in the near future. In addition, the approximately $7 million still owed on those loans ($3 million of which is the subject of a recently filed collection action) is not sufficient to repay the 2014 investors, who are owed a total of approximately $9 million in principal and interest, and are due to be repaid on April 30, 2015.

The farm loan defaults and looming investment shortfall were not disclosed to the investors in the 2014 Offering. Defendants Haab, Risinger, and Senefeld have advised the Commission that their only recourse to repay the investors is by fees they expect to receive from other existing or planned offerings, including at least two 2015 farm loan offerings to Veros clients through which they are seeking to raise almost $25 million. The SEC brought this action to enjoin Defendants from raising additional investor funds, to prevent them from ensnaring more victims in their scheme, and to prevent the further dissipation of investor assets. The SEC also seeks the disgorgement of Defendants’ ill-gotten gains, as well as prejudgment interest and significant civil penalties.


Do you have questions about embezzlement?  Give Prosperident a call at 888-398-2327 or send an email to requests@dentalembezzlement.com

 

Content retrieved from: http://www.johnschapman.com/investment-fraud/veros-partners-charged-with-fraud/

 

See SEC complaint here — https://www.sec.gov/litigation/complaints/2015/comp23246.pdf