U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 18253 / July 28, 2003
SEC v. Glen W. Hilker, Larry M. Baker , Project Dacono LLC and HB Investors LLC, and relief defendants HSB Development Co. LLC, Westco Investment & Finance, Inc., TriCord LLC and Brookshire Development Co. LLC
Civil Action No. 03-RB-1338 (District of Colorado)
On July 24, 2003, the Securities and Exchange Commission filed suit in the United States District Court for the District of Colorado against Glen W. Hilker, Larry M. Baker , Project Dacono LLC and HB Investors LLC, and relief defendants HSB Development Co. LLC, Westco Investment & Finance, Inc., TriCord LLC and Brookshire Development Co. LLC, all of Denver. The Commission alleged that, from at least September 2000 through March 2003, defendants Hilker and Baker, through defendant HB Investors LLC, collectively raised over $4.7 million on behalf of defendant Project Dacono LLC for the purchase and development of real estate located in Dacono, Colorado. Mr. Hilker and Mr. Baker raised these funds by offering and selling PDL and HBI securities to investors located throughout several states.
In raising these funds, the defendants made numerous false statements to investors, primarily concerning the use of investor proceeds. In fact, only approximately $1.7 million of the funds raised were actually used for the purchase and development of the Dacono property. The remaining $3 million of investor proceeds was used by Mr. Hilker and Mr. Baker for their own personal use, was diverted to alter ego entities they controlled, was invested in risky business ventures unrelated to the Dacono property and was used for payment of Ponzi-type interest payments to other investors.
The Commission alleged that the defendants violated the antifraud provisions of the federal securities laws set forth in 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. The Commission's action seeks permanent injunctions prohibiting future violations of these provisions, disgorgement of the defendants' ill-gotten gains plus prejudgment interest, and civil penalties against each defendant. Additionally, the Commission's action seeks emergency injunctive and equitable relief consisting principally of a temporary restraining order and an order freezing the assets of defendants Hilker, Baker, and HB Investors, and of relief defendants HSB, Westco, TriCord and Brookshire.