SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17925 / January 13, 2003
SECURITIES AND EXCHANGE COMMISSION v. JORDAN ENTERPRISES LLC, et al., No. CV 02-9889 PA (CTx) (C.D. Cal.)
SEC FILES FRAUD CHARGES AND OBTAINS
PRELIMINARY INJUNCTION AND ASSET FREEZE
AGAINST OPERATORS OF "ADVANCE FEE" SCHEME
On January 9, 2003, the Commission obtained preliminary injunctions and asset freezes from the United States District Court for the Central District of California to stop an ongoing type of "advance fee" securities fraud. The relief was obtained against all defendants in an emergency lawsuit the Commission filed on December 30, 2002, which charged Leon Jordan II, Jordan Enterprises, LLC, Jordan Holdings, LLC, Raymond Brown, and Ray Brown & Associates with securities fraud and with operating as unregistered broker-dealers. The Commission's complaint also named Jordan's wife, Sheila S. Jordan, as a relief defendant who was unjustly enriched by receiving proceeds from the defendants' fraudulent scheme.
Contemporaneous with the filing of the lawsuit on December 30, the Commission sought and obtained from the Court an order that, among other things, temporarily froze the assets of the defendants and relief defendant, temporarily restrained the defendants from continuing their violations of the securities laws, and ordered the defendants and relief defendant to retain relevant documents. In its order on January 9, the Court granted similar relief to continue until a hearing on the merits, finding that the Commission had demonstrated a strong likelihood that it will prevail at trial on the merits of the case. The Court also ordered the defendants and relief defendant to provide discovery on an expedited basis and to prepare and deliver to the Commission a detailed and complete schedule of all of their personal assets and a description of the sources of all funds they have obtained from the conduct alleged in the complaint.
The Commission's complaint alleges that since at least December 2001, the defendants have fraudulently raised at least $850,000 by offering unwitting individuals and entities seeking venture capital (the "participants") the opportunity, for a fee, to receive proceeds from bond offerings that do not exist. According to the complaint, the defendants have falsely represented to participants that: (1) they are the exclusive coordinators and intermediaries of several multi-billion dollar bond offerings in which well known large financial institutions are involved; (2) in exchange for a fee (denominated as a "due diligence" fee), the defendants will assist the participants in obtaining the proceeds of a specific bond offering; and (3) the participants' fees will be refunded if the defendants are unable to secure participation in the proceeds of the bond offering for the participants. The complaint alleges that the well-known financial institutions purportedly involved in the defendants' bond offerings have in fact disclaimed any involvement in any bond offering with the defendants, and that there is no evidence that any of the bond offerings exist, or have ever existed. The complaint further alleges that none of the participants have received any funding from the defendants, that the defendants have not returned any portion of the participants' fees, and that the defendants are continuing to solicit funds from other potential participants.
The named defendants and relief defendant are:
- Leon Jordan II, a resident of Rancho Cucamonga, California, who is the president and chief executive of defendant Jordan Enterprises, LLC and the apparent principal of defendant Jordan Holdings, LLC. According to the complaint, Jordan's resume and marketing materials include references from celebrities such as lawyer Johnnie Cochran and former NBA player A.C. Green, and claim that Jordan has participated in over 100 securities offerings since 1985.
- Jordan Enterprises, LLC, a California limited liability company headquartered in Los Angeles, California.
- Jordan Holdings, LLC, a Nevada limited liability company headquartered in Rialto, California.
- Raymond J. Brown, a resident of Marrero, Louisiana who holds himself out as a Certified International Financier and the founder of Ray Brown & Associates. According to the complaint, on three occasions from November 1997 through February 1999, Brown applied to obtain series 6 and 63 securities licenses, but failed the required examinations.
- Ray Brown & Associates, a Louisiana corporation operated by defendant Brown. According to the complaint, defendant Brown describes Ray Brown & Associates as a full-service brokerage house, but it has never been registered with the Commission as a broker-dealer.
- Sheila S. Jordan, named as a relief defendant, who is a resident of Rancho Cucamonga, California and the wife of defendant Jordan.
The Commission's complaint charges the defendants with committing securities fraud in violation of Section 17(a) of the Securities Act of 1933, and with operating as unregistered broker-dealers in violation of Section 15(a)(1) of the Securities Exchange Act of 1934. In addition to the relief already ordered by the Court, the Commission is requesting the Court to enjoin the defendants from violating the federal securities laws, order them to disgorge ill-gotten gains with interest, and impose civil penalties against them. The Commission is also requesting the Court to order relief defendant Sheila S. Jordan to disgorge any illegally obtained funds she received from the defendants.
SEC Complaint in this matter