U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 21026 / May 6, 2009
Securities and Exchange Commission v. Robert P. Copeland, Civil Action No. 1:09-CV-0943-JEC (N.D. Ga.)
On May 4, 2009, the Honorable Julie E. Carnes, United States District Judge for the Northern District of Georgia, entered an order of permanent injunction and other relief against defendant Robert P. Copeland, a Georgia resident and an attorney licensed to practice in the State of Georgia. The order permanently enjoined Copeland from future violations of the registration and antifraud provisions of 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. Copeland was ordered to pay disgorgement, prejudgment interest and a civil penalty in amounts to be determined by the Court upon motion of the Commission at a later date. Copeland consented to the entry of the order without admitting or denying the allegations of the Commission's Complaint.
The Commission's Complaint was filed on April 9, 2009. It alleged that from at least 2004 through January 2009 Copeland fraudulently raised over $35 million from at least 140 investors in Georgia and several other states, ant 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. The Complaint further alleged that 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 alleged 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 alleged 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. 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 alleged that Copeland orchestrated a classic Ponzi scheme, in which he used new investor funds to make payment obligations to earlier investors.
See also: L. R. 20994 (April 9, 2009).