A Florida yogurt salesman has agreed to pay back more than $1 million that he took from investors to create jobs but instead used for himself, the Securities and Exchange Commission announced Wednesday.
Jason Adam Ogden of Southwest Ranches, Fla., created AJN Investments LLC to conduct an investment offering in conjunction with the EB-5 program, which provides foreign investors with a path to permanent residency when their investments create at least 10 jobs for American workers.
He raised a total of $6.7 million that was supposed to be invested in franchises for his two smoothie and frozen yogurt companies, Juiceblendz and Yoblenda. Instead of investing the money, he used at least $1,008,000 to pay for meals, entertainment and to pay back a personal loan, the SEC said.
The foreign investors were allegedly told their money would help build and operate Juiceblendz and Yoblendz stores in strip malls and create a sufficient amount of jobs for them to qualify for an EB-5 visa and ultimately a green card.
But Ogden changed his business model midstream without updating the offering materials, focusing on developing kiosks in sports arenas and university campuses rather than following through with the construction of full-size stores, according to the SEC's complaint. Not only did this result in smaller-than-promised returns for investors, but also jeopardized their EB-5 program status because kiosks don't stimulate the same job creation as full-size stores and construction projects, the SEC said.
Under a deal with the SEC in which he did not admit or deny guilt, Ogden agreed to pay back the amount of investor funds he misused, and to pay $41,024 in interest and a penalty of $160,000