U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20987 / April 6, 2009
[Securities and Exchange Commission v. Whispering Winds Properties, LLC; LM Beagle Properties, LLC; Karlena, Inc.; Axis International, Inc.; and Dan Wise aka Danny Wise, U.S. District Court for the District of Arizona, Case No. 2:09-CV-00676 (filed Apr. 2, 2009)]
SEC HALTS $67 MILLION DOLLAR REAL ESTATE INVESTMENT SCHEME IN ARIZONA
The Securities and Exchange Commission today announced that it has obtained a temporary restraining order, asset freeze, and other emergency relief against a former Arizona certified public accountant for targeting his accounting clients in a multi-million dollar real estate investment scheme.
The Commission’s complaint names Dan Wise, age 52, of Scottsdale, Ariz., and his four companies Whispering Winds Properties, LLC, LM Beagle Properties, LLC, Karlena, Inc., and Axis International, Inc. The complaint alleges Wise solicited his tax and accounting clients, and their friends and family, encouraging them to borrow money to invest with him. The complaint alleges that, from July 2001 to January 2009, Wise raised more than $67 million from approximately 125 investors by touting his 10 to 15 years of experience in real estate investments and luring investors with promises of lucrative annual returns ranging from 12% to 22%. The complaint further alleges that Wise claimed to use investor funds to make short-term real estate loans that would be fully collateralized and assured investors that they could obtain their principal anytime on 24 to 48 hours notice. The complaint alleges Wise never funded real estate loans, never paid the promised returns to investors, and never honored investors’ redemption requests.
The Honorable Mary H. Murguia, United States District Judge for the District of Arizona, on April 2 granted the Commission’s application for a temporary restraining order against the defendants and issued orders freezing defendants’ assets, prohibiting the destruction of documents, requiring accountings, and granting expedited discovery. On April 9, the Court will hold a hearing on the Commission’s motion for a preliminary injunction and appointment of a permanent receiver.
The Commission’s complaint charges the defendants with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and seeks, in addition to the emergency relief, preliminary and permanent injunctions, disgorgement with prejudgment interest, and civil penalties.
In a separate administrative action on April 3, the Commission forthwith suspended Wise from appearing or practicing before the Commission as an accountant, based on the Arizona State Board of Accountancy’s revocation of Wise’s license as a certified public accountant. In the Matter of Dan Wise, CPA, a/k/a Danny Wise, CPA, Admin. Proc. File No. 3-13430, Securities Exchange Act Release No. 59703; AAER No. 2959 (Apr. 3, 2009).