U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20994 / April 9, 2009
Securities and Exchange Commission v. Robert P. Copeland, Civil Action No. 1:09-cv-0943 (N.D. Ga. April 9, 2009)
On April 9, 2009, the Securities and Exchange Commission ("Commission") filed a Complaint for Injunctive and Other Relief ("Complaint") in the United States District Court for the Northern District of Georgia against Robert P. Copeland ("Copeland"). The Complaint sets forth a classic Ponzi scheme operated by Copeland, in which he used new investor funds to make payment obligations to earlier investors.
The Complaint alleges that from at least 2004 through January 2009 Copeland, a Georgia resident and an attorney licensed to practice in the State of Georgia, fraudulently raised over $35 million from at least 140 investors in several states, including Georgia. The Complaint further alleges that Copeland promoted investments orally and through written materials claiming to earn 15-18 percent interest per year, and claiming that investor funds would be loaned in connection with real estate transactions, including private mortgage lending. Through entities which he controlled, Copeland directed the unregistered offer and sale of promissory notes evidencing the investor loans. The notes were often collateralized by security deeds to which Copeland signed the names of fictitious persons.
The Complaint alleges that Copeland represented to investors that the loans were safe and secured by real estate. In reality, Copeland used comparatively few of the investor funds in connection with real estate acquisition or development. The Complaint also alleges that Copeland promised, among other things, a current rate of return of 15 percent and represented to investors past returns as high as 18 percent. In reality, the representations were false and misleading because Copeland never consistently generated 15 percent annual returns and was not investing the funds as represented. The Complaint further alleges that Copeland deposited investor funds into four bank accounts in the name of his law firm, and that he misappropriated millions of dollars of investor funds for his personal use, spending the funds in connection with his personal residence, vehicles, and expensive artwork, among other things.
The Complaint alleges that Copeland has violated the registration and antifraud provisions of the federal securities laws, Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Commission's Complaint seeks (i) a permanent injunction against future violations; (ii) disgorgement of ill-gotten gains plus prejudgment interest; and (iii) imposition of civil penalties.
The Commission thanks the United States Attorney's Office for the Northern District of Georgia for its assistance in this matter.