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Articles Posted in Promissory Notes

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Piggybank In A CageThe Securities and Exchange Commission (“SEC”) has filed a fraud lawsuit in federal court in Colorado against a group of companies known as “Financial Visions” and their principal, Daniel B. Rudden (“Rudden”), who allegedly bilked at least 150 investors in a $55 million alleged Ponzi scheme.

The SEC’s complaint charges that Rudden, operating under the name Financial Visions and through a group of companies, issued promissory notes to fund a line of business involving providing financing for funeral services and related expenses to consumers.  The SEC alleges that Rudden/Financial Vision defrauded as many as 150 investors after promising them annual returns of 12% or more.  Since 2010 or 2011, Rudden allegedly used new investor funds to pay interest and redemptions to existing investors and concealed the Financial Visions companies’ true financial performance and condition.

The SEC Complaint is accessible here.

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On June 5, 2018, the SEC filed a Complaint in U.S. District Court in the Central District of California (Case 2:18-cv-05008), charging Ralph T. Iannelli and Essex Capital Corporation (“Essex”) with violations of the antifraud provisions of the federal securities laws.  The SEC has alleged that Mr. Iannelli — acting through his equipment leasing company, Essex — perpetrated a long-running fraud in connection with an $80 million securities offering involving approximately 70 investors.  The Complaint is accessible below:

Essex SEC Complaint

As alleged by the SEC, from 2014 – 2017, Mr. Iannelli attracted investor capital through the sale of promissory notes that paid a high rate of return (typically 8.5%, but as high as 10% per annum).  In certain of its marketing materials, Essex claimed that 100% of investor funds would be utilized to purchase equipment, and that investors would be paid back on their investment within a 3-year time frame.  In actuality, however, the SEC has alleged that Essex’s business was anything but profitable: “Unbeknownst to the investors… the representations Iannelli made about their investment were materially false and misleading.”  By 2014, the SEC has alleged that Essex spent only $2.3 million, or approximately 9% of capital it had raised that year through the sale of promissory notes ($20 million) and certain bank loans ($6 million), to actually purchase equipment.

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