The SEC alleged that Castleberry, Turner and Strell defrauded at least 15 investors nationwide out of $3.6 million using an alternative investments-themed scheme that promised investors the firm had “hundreds of millions of dollars in capital invested in local businesses and a portfolio of hundreds of investment properties.”
According to the SEC, Castleberry offered investors guaranteed returns ranging from 7.93% to 12.23% per year, depending on the fund and the number of years invested, with an additional 0. 76% if the interest was paid annually. Contrary to its representation that it managed seven separate funds, Castleberry pooled investor funds in one bank account that was controlled by Turner and Strell, the SEC said.
The SEC said Strochak agreed to a judgment that permanently enjoins him from violating the charged provisions of the federal securities laws, and orders him to pay disgorgement and prejudgment interest totaling $250,056, to be offset by any restitution order entered against him in the parallel criminal case. The settlement is subject to court approval.