On January 21, 2022, the U.S. District Court for the Southern District of Indiana entered a final consent judgment against George S. Blankenbaker, an Indianapolis-area resident, and three of his companies who were previously charged by the SEC with raising over $11 million by defrauding more than 100 investors, many of whom were elderly.

According to the SEC's complaint filed on March 31, 2021, between August 2016 and May 2019, Blankenbaker and his companies, StarGrower Commercial Bridge Loan Fund 1 LLC, StarGrower Asset Management LLC, and Blankenbaker Investments Fund 17 LLC, falsely told investors that their money would be used to make short-term loans to food exporters in Asia, and that the investments were secured by shipping containers holding the food products. In fact, the complaint alleges, Blankenbaker misused at least $8.1 million of their money, including by directing at least $4 million to hemp companies, using at least $965,000 in new investor funds to make Ponzi-style payments to prior investors, and misappropriating at least $1.7 million in investor funds for his own personal benefit. The complaint also alleges that, as result of Blankenbaker's fraud, investors lost at least $8.1 million.

Blankenbaker and his companies consented to the entry of a final judgment that enjoins them from violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and violations of the registration provisions of Section 5 of the Securities Act as to Blankenbaker, StarGrower Commercial, and StarGrower Asset. Blankenbaker was ordered to pay disgorgement and prejudgment interest totaling $1,920,130, with this disgorgement obligation offset by the $1,180,503.92 order of restitution entered in a criminal case filed against him under United States v. George Blankenbaker, No. 1:21-cr-102-SEB-TAB (S.D. Ind., Mar. 31, 2021), leaving a remainder of $739,626.08 for Blankenbaker to disgorge. Further, the Court imposed an officer-and-director bar against Blankenbaker. Blankenbaker's companies were ordered to pay disgorgement and prejudgment interest totaling $5,199,808.02 on a joint-and-several basis. The companies consented to entry of the order without admitting or denying the allegations in the SEC's complaint.

In a related administrative proceeding filed on February 8, 2022, Blankenbaker has agreed to the issuance of an SEC order permanently barring him from associating with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or national recognized statistical rating organization. In the parallel criminal action, Blankenbaker pled guilty to charges of wire fraud and money laundering, and on August 2, 2021, was sentenced to 60 months of incarceration and three years of supervised release, in addition to the restitution order.

The SEC's investigation was conducted by James G. O'Keefe and Trevor Schumacher and supervised by Steven L. Klawans of the Chicago Regional Office. The litigation was led by Benjamin J. Hanauer. The SEC appreciates the assistance of the U.S. Attorney's Office for the Southern District of Indiana, the Internal Revenue Service - Criminal Investigation, and the U.S. Postal Inspection Service.

For further information, see Litigation Release 25063 (April 1, 2021) and Administrative Proceeding Nos. 3-20492, 3-20493, 3-20494 (all August 30, 2021), and 3-20706 (January 18, 2022).