An Arizona man has been charged with orchestrating a multi-million dollar theft of investors’ money to pay for strip clubs and vacations to Disneyland and Hawaii, among other things, the Securities and Exchange Commission announced Friday.
Four of his Arizona-based cohorts also were named in the complaint about the scheme, which cost investors more than $17 million, the SEC civil complaint says. The five made car payments, bought clothes, and paid for travel and entertainment with the money.
Jason Mogler of Scottsdale is charged with orchestrating the fraud. Also charged are James Hinkeldey of Scottsdale, Casimer Polanchek of Chandler, Brian Buckley of Gilbert and James Stevens of Fort Mohave. They allegedly misappropriated roughly 97 percent of the $18 million they raised from 225 investors.
The investors were told the funds would be used to acquire and develop beachfront property in Mexico as well as to operate recycling facilities and purchase foreclosed residential properties for resale. They repeatedly lied about the progress of the investments to calm worried investors when payments on the promissory notes were overdue and they sometimes used new investors’ money to pay investors threatening to sue them, the SEC says.
According to the SEC’s complaint filed in U.S. District Court for the District of Arizona, Mogler stole the bulk of the money, nearly $10 million, and the others stole lesser amounts. The five men used their radio show, The Investment Roadshow, to lure investors in and they provided instructions to listeners on how they could use self-directed IRAs to invest in their companies.
The SEC’s complaint charges the five with fraud and seeks recovery of the ill-gotten gains plus penalties.