The Securities and Exchange Commission today filed settled charges against New Mexico resident Frank G. Mueller, the former CFO of Santa Fe Gold Corporation, with making false statements that effectively helped conceal the misappropriation of approximately $1 million of investor funds by the company's former CEO, Thomas H. Laws. Laws was previously the subject of an emergency action and asset freeze.

The SEC's complaint alleges that Mueller, at the time of Laws' misconduct, became aware of numerous red flags showing that the investor funds were missing. In particular, the complaint alleges that Laws provided Mueller with inconsistent explanations about $500,000 that had purportedly been escrowed for the purchase of a silver mine. The complaint further alleges that Mueller nevertheless signed the company's annual report on Form 10-K for the year ended June 30, 2017, and the corresponding management representation letter that Santa Fe Gold provided to its independent auditor, both of which falsely represented that $500,000 had been escrowed towards the purchase of a mine.

The SEC's complaint, filed in U.S. District Court for the District of New Mexico, charges Mueller with violating the antifraud provisions of Sections 17(a)(1) and (3) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint further charges Mueller with the internal controls and books and records provisions of Section13(b)(5) of the Securities Exchange Act and Rules 13a-14, 13b2-1 and 13b2-2 thereunder, and with aiding and abetting violations of the reporting, books and records, and internal control provisions of Securities Exchange Act Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) and Rules 12b-20 and 13a-1 thereunder.  Without admitting or denying the allegations, Mueller consented to a permanent injunction, a $50,000 civil penalty, and five-year officer and director and penny stock bars. The proposed settlement is subject to district court approval.

The SEC's investigation was conducted by Michael Cates and Donna Walker and supervised by Ian S. Karpel and Jason Burt.