U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 22034 / July 12, 2011
SEC v. Ronald F. LeGrand and Frederick E. Wheat, Jr., Civil Action No. 2:11-CV-0474 (S.D. W.Va.)
SEC Charges Ronald F. LeGrand and Frederick E. Wheat, Jr. with Making Fraudulent Representations in the Unregistered Offer and Sale of Securities in Mountain Country Partners, LLC
The Securities and Exchange Commission announced today that on July 12, 2011, it filed a settled civil action in the United States District Court for the Southern District of West Virginia against Ronald F. LeGrand ("LeGrand"), a founder and the sole manager of Mountain Country Partners, LLC ("MCP"), a West Virginia oil and gas company, and one of his former partners, Frederick E. Wheat ("Wheat"). The Commission alleges that, from September 2006 through December 2006, LeGrand and Wheat raised over $9.5 million for MCP from approximately 54 investors located throughout the United States through the sale of promissory notes and limited partnership membership interests. These funds were raised primarily via e-mail and in-person solicitations from individuals who attended real estate investment seminars promoted and taught by LeGrand, and were used to purchase the land and other assets of a bankrupt oil and gas company headquartered in West Virginia. At the time of their solicitations, neither LeGrand nor Wheat was experienced in working or investing in the oil and gas industry. Despite this inexperience, LeGrand and Wheat solicited investors by making material misrepresentations and omissions regarding the investment, including the degree of risk, amount of expected returns, value of the company's assets, and the guaranteed return of principal and interest within as little as 90 days. In addition, LeGrand and Wheat failed to register MCP's securities offerings, although no exemption from registration applies. To date, MCP has been unable to repay investors the returns promised by LeGrand and Wheat.
LeGrand and Wheat agreed to settle the Commission's charges, without admitting or denying the allegations in the Commission's complaint. Under the settlement, which is subject to the court's approval, LeGrand and Wheat consented to a judgment permanently enjoining them from violating Sections 5(a), 5(c), 17(a)(2) and 17(a)(3) of the Securities Act of 1933. The judgment also orders LeGrand to pay a civil penalty in the amount of $150,000.