TKO Farms, Inc. and Agravitae, Inc., as well as Kenneth Dewayne Owen, Reynaldo Aguilar, James Brian Blaylock, and Ross Gregory Erskine, and the Estate of Gilbert Allan Penhollow, all of the Los Angeles area, have been charged by the Securities and Exchange Commission in connection with allegedly unregistered and fraudulent offerings of securities effected through unregistered telephone solicitors.
The Securities and Exchange Commission (SEC) has accused TKO Farms Inc., a company with headquarters in Florida, of running a fraudulent Ponzi scheme to defraud investors. The claims act as an ideal wake-up call of the meaning of carrying out the comprehensive groundwork on an open door before committing to it.
The Context of the Investigation
TKO Farms Inc. was established in 2016 with the stated goal of purchasing cattle for resale and breeding them for that purpose. The business claimed to have a proven track record of success and promised potential investors returns of up to 20%.
The SEC, on the other hand, asserts that TKO Farms Inc. was actually operating a Ponzi scheme in which it paid out returns to previous investors who had already invested. In addition, it is alleged that the company fabricated financial statements in order to create the impression that the plan was legal.
The Investigation Conducted By The SEC
After investors complained that they had not received the promised profits, the Securities and Exchange Commission (SEC) began an investigation into TKO Farms Inc. in 2020. The investigation revealed that the business had raised more than $8.5 million from investors, the majority of whom were elderly and retired.
As per the discoveries of the examination, technical knockout Ranches Inc. had likewise used financial backer monies for individual requirements, like buying costly cars, taking some time off, and leasing a confidential plane.
The Accusations and the Repercussions
The Securities and Exchange Commission (SEC) has filed charges against TKO Farms Inc. and its creator, Thomas K. Oblak, for violating the antifraud provisions of the federal securities laws as a result of the investigation. The Protections and Trade Commission is hoping to have poorly gotten gains spewed, as well as prejudgment interest and common punishments.
The Department of Justice has also filed criminal charges against Oblak in connection with the Ponzi scheme, alleging that he engaged in wire fraud and money laundering.
As per the charges in the SEC’s grumbling, which was recorded in the U.S. Area Court for the Focal Region of California, between May 2017 and Walk 2021, technical knockout Homesteads and Agravitae raised almost $20 million from financial backers through contributions of their protections.
According to the SEC, Owen had a history of bankruptcy, regulatory actions, criminal convictions, and undisclosed de facto control over both companies. He also recruited and employed Aguilar, Blaylock, Erskine, and Penhollow, none of whom were registered as brokers or dealers, to solicit investors for the securities offerings on behalf of the two companies. Further, defendants TKO Farms, Agravitae, and Owen are accused of fabricating information regarding Owen’s background, control over the two businesses, and use of investor funds.
Each defendant is accused of breaking the registration requirements of Section 5 of the Securities Act of 1933 and the broker-dealer registration requirements of Section 15(a)(1) of the Securities Exchange Act of 1934, according to the SEC’s complaint. In addition, TKO Farms, Agravitae, and Owen are all accused of breaking the anti-fraud provisions of Section 10(b) of the Exchange Act, Rule 10b-5 thereunder, and Section 17(a) of the Securities Act. The SEC’s lawsuit seeks civil penalties, prejudgment interest disgorgement, and permanent injunctions as remedies.
The SEC’s examination was directed by James Thibodeau and was administered by Tanya Facial Hair. Tracy Combs and Casey Fronk will lead the lawsuit.
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