The Securities and Exchange Commission today announced fraud charges against a California businessman accused of stealing investor assets and then trying to cover it up once the SEC caught onto his scheme.
The SEC alleges that Daniel R. Nase raised money from investors through an unregistered offering of common stock in his Bakersfield, California-based company, BIC Real Estate Development Corp., and used the funds for personal expenses. According to the SEC’s complaint filed in U.S. District Court for the Eastern District of California:
- Nase told investors that BIC would invest in real estate and promissory notes. With money he used to purchase real estate and notes, Nase improperly titled most of the properties in his name or his wife’s name or their family trust, not BIC.
- Nase used some investor funds to pay for clothing, vacations, student loans, and other personal expenses.
- Nase tried to cover up his theft after learning of the SEC’s investigation by investing stolen assets back into the company to make it appear he was increasing his equity stake in it.
Nase was not registered with the SEC or any state regulator to sell investments. Investors can quickly and easily check whether people selling investments are registered by using the SEC’s investor.gov website.
“Those raising money for a business venture must use it as promised and not to simply enrich themselves,” said Michele Wein Layne, Director of the SEC’s Los Angeles Regional Office. “As alleged in our complaint, time and again Nase used investor funds for an illicit personal benefit.”
The SEC’s complaint charges Nase and BIC with violating federal antifraud laws and rules and securities registration provisions. The complaint seeks emergency relief in the form of a temporary restraining order, asset freeze, and a preliminary injunction. It also seeks return of allegedly ill-gotten gains along with interest, penalties, and permanent injunctions and other relief against Nase and BIC.
The SEC’s investigation was conducted by Manuel Vazquez, Matthew Montgomery, Roger Boudreau, and Robert Conrrad, and the litigation will be led by John Berry, John Bulgozdy, Mr. Vazquez, and Mr. Montgomery.