Churchville also admitted to attract new investments, “he lied and told investors that ClearPath’s previous investments with JER Receivables had been successful and produced high rates of return. He used this money to pay back the JER investors and told them, falsely, that the money was the return on their investments,” the DOJ said.
The SEC’s case was more expansive, alleging that that Churchville and ClearPath used a variety of deceptive acts and misleading accounting tricks to conceal their fraud through 2013 and then prolonged the scheme by lying to investors about the status, worth, and disposition of those investments.
When fund investors requested distributions of their investments, Churchville lied “to investors about the status, worth and disposition of those investments, lulling investors in believing they were investing in a legitimate fund,” the agency said.
To marshal the $29,103,738 in assets Churchville owes investors, the court appointed a receiver in July 2015 to pursue the two defendants as well the private funds advised by Churchville and ClearPath.
“The receiver's work continues,” the SEC said in a statement.