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Tag: green energy investments

  • SEC: Felons, Recidivists Pushed ‘Green’ Energy Securities Swindle Through California ‘Boiler Room’; 6 People Charged In $11 Million Fraud Case

    About 200 investors turned over $11 million to a boiler-room operation selling investments in a purported “green” energy company, the SEC said.

    The alleged swindle in which Kensington Resources Inc. sold unregistered shares of American Environmental Energy Inc. (AEEI) was pulled off by a convicted felon with the help of a recidivist securities offender, the SEC alleged.

    Also charged in the case was yet-another convicted felon who was sentenced to federal prison more than a decade ago for telemarketing fraud, along with yet-another recidivist securities fraudster sued by the SEC in in 1998, according to records.

    All in all, the SEC charged six people in the alleged boiler-room caper:

    • Joseph Rudolph Porche, 51, of Aliso Viejo, Calif. Porche, one of two alleged ringleaders and the former chief executive officer of Kensington, pleaded guilty in 2001 to four counts of mail fraud and was sentenced to 37 months in prison, the SEC said. Federal records show he was released from prison in 2003.
    • Larry Ray Crowder, 53, of Newport Coast, Calif. Also named a ringleader by the SEC, Crowder is Kensington’s former president. Crowder was charged by the SEC in 1998 with raising at least $15.7 million from more than 600 investors in an oil-and-gas venture. The oil-and-gas scheme involved misrepresentations in the sale of limited partnerships, the SEC said.
    • Gary Kennan Juncker, 47, of Rancho Santa Margarita, Calif. Juncker is a former senior vice president at Kensington. In 1998, according to records, Juncker was convicted on four counts of mail fraud in a telemarketing scheme and was sentenced to 30 months in prison. Federal records show he was released from prison in 2000.
    • Dale Jay Engelhardt, 46, of San Clemente, Calif. Engelhardt, a former member of Kensington’s sales staff, was one of Crowder’s co-defendants in the 1998 swindle, the SEC said.
    • Konrad Christian Kafarski, 40, of Trabuco Canyon, Calif. Kafarski is the former senior vice president of business development at Kensington.
    • Carlton Ladell Williams, 51, of Coto de Caza, Calif. Williams is a former senior vice president at Kensington.

    “Most of the funds raised were kept by Porche and Crowder to fund their lavish lifestyles and only $315,000 of the $11 million raised went to AEEI,” the SEC alleged.

    AEEI was a penny stock. The 1998 case in which Crowder and Englehardt were charged involved a company that went by the acronym “EEI,” which stood for “Environmental Energy Inc.,” according to the SEC.

  • FINRA Issues Alert On ‘Green Energy’ Scams In Wake Of SEC’s Ponzi Allegations Against Mantria/Speed Of Wealth

    As the year of the Ponzi scheme comes to a close, the Financial Industry Regulatory Authority has issued an Investment Alert warning the public about a relatively new form of fraud: “green energy investments” that trade on investors’ affinity for keeping the planet clean.

    Such schemes “promise large gains from investing in companies purportedly involved in developing or producing alternative, renewable or waste energy products,” FINRA said.

    Among the companies it cited in its fraud alert was Philadelphia-based Mantria Corp., accused by the SEC last month of operating a Ponzi scheme pushed by Colorado-based Speed of Wealth LLC.

    “Right now there are a lot of legitimate stories in the news about green energy initiatives, and con artists want to leverage people’s interest in green energy to make a quick buck at investors’ expense,” said John Gannon, FINRA senior vice president for Investor Education. “There is a lot of interest in companies that claim to provide green energy, but we issued this Alert to remind investors to be vigilant about avoiding investment scams, no matter how they are packaged.”

    Citing the SEC’s Mantria case, FINRA said environmentally conscious investors should pay strict attention to how they’re approached in sales presentations. Language and hype used in pitches can provide important clues that a “fashionable hook” is being used to pick investors’ pockets.

    “[T]he Securities and Exchange Commission alleges that promoters of purported eco-friendly investment opportunities lured 300 investors into a $30 million Ponzi scheme, encouraging participants to finance such ‘green’ initiatives of Mantria Corporation as a supposed ‘carbon negative’ housing community in rural Tennessee and a ‘biochar’ charcoal substitute made from organic waste,” FINRA said.

    “Investors were falsely promised returns ranging from 17 percent to ‘hundreds of percent’ annually, FINRA continued, citing the SEC allegations. “The scammers encouraged investors attending seminars or online webinars to liquidate their traditional investments such as retirement plans, stocks, bonds, and mutual funds. Investors also were urged to borrow as much as possible against their home or business so that they could invest in Mantria. But, according the SEC’s complaint, Mantria did not generate any income from which such extraordinary returns could be paid.”

    FINRA also cited other examples of alleged “green” fraud.

    “One solar panel stock, for example, was touted as ‘set for a 200% gain,’” FINRA said. “A different stock in a China-based wind-power company was extolled as a ‘one in a million’ opportunity that could quickly climb to ’51X its current level.’

    “In another instance,” FINRA continued, “an investment-related blog praised a company with a hydrogen-based solution, claiming the stock ‘soared 500% in one week’ and suggesting a nexus between federal energy research and the company’s prospects for growth. Specifically, the blogger noted: ‘The U.S. Government has a hydrogen initiative. Billions are being spent on hydrogen technologies. [The company] is again at the right place at the right time.’”

    FINRA’s alert advises investors “to ignore unsolicited investment recommendations and to question the source of investment information. Investors should also be wary of investments that claim to be the next big thing and promise exponential returns.”

    Read the FINRA Investment Alert on “green” schemes.