A former Securities America broker and certified public accountant has been barred by the SEC for participating in a Ponzi scheme that defrauded investors of about $1 billion.

According to the SEC, between 2011 and 2018, Ronald J. Roach, 53, of Walnut Creek, Calif., and an accomplice, Joseph Bayliss of Martinez, Calif., sold investment opportunities through their privately held alternative energy companies, which were in the business of making, leasing and operating mobile solar generators.

Roach, who has been registered as a broker with the SEC since 1999, was barred under a consent agreement with the agency, the SEC said.

In a parallel criminal case, Roach on October 22 pleaded guilty to conspiracy to commit fraud, according to the U.S. Attorney's Office of the Eastern District of California.

The SEC complaint said the companies raised about $910 million from purchasers of the investment contracts. It designed the investments to take advantage of tax credits that were available to certain alternative energy related projects and purportedly involved the purchase and leasing of thousands of generators. 

But the complaint said the generators were never even manufactured, let alone put into use, and the vast majority of revenue to investors came from investor money, not from actual lease payments.

The SEC said the losses had face values of more than $2.7 billion because investors in the Investment fund contracts financed about 70% of the amount of their investments through promissory notes.

The companies were marketed by Roach and Bayliss as having extensive experience and capabilities in the renewable energy field and in executing successful transactions for investors, the SEC said. Investors were solicited through brokers and salespeople using various methods, including email, conference calls and in-person meetings.

Roach tricked investors by preparing years of financial statements that falsely characterized investments to purchase solar generators as revenue earned from the rental of those generators, according to prosecutors in the criminal case.

Roach and his co-conspirators used those fraudulent financial statements to hide from investors the company’s use of later investor payments to pay financial obligations the company made to earlier investors—in a classic Ponzi-like scheme, authorities said.

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