A Scottsdale, Ariz., investment manager has agreed to a more than $3 million settlement with the SEC after being charged with defrauding clients who thought they were investing, in part, in an American Indian business that promised up to 20 percent returns.
David A. Harbour used $1.54 million of the investors’ money to pay a Beverly Hills plastic surgeon and for private jets and luxury cruises, among other personal expenses, the SEC announced Tuesday. He also used investors’ money to make payments on personal loans and debts he owed to investors in prior business ventures.
Without admitting or denying guilt, Harbour agreed to pay disgorgement of $1.54 million plus prejudgment interest of $97,072, and a penalty of $1,535,000.
Between July 2014 and August 2016, Harbour raised $2.5 million from four friends and business acquaintances by representing to them that their money would be used to finance various businesses, including an American Indian business engaged in high-interest installment lending to consumers.
He told investors he would use their money exclusively for revenue-generating businesses, and promised them annual returns ranging from 12 percent to 20 percent, the SEC said.
The SEC complaint was filed in federal district court in Tucson, Ariz.