SEC v. Aronson, et al. Case No: 1:11-cv-7033-JSR (S.D.N.Y.) SEC v. Feldstein Case No: 12-cv-5715-JSR (S.D.N.Y.)
Oct. 6, 2022
On October 6, 2011, the Commission filed a complaint (the “Permapave Complaint”) against Eric J. Aronson (“Aronson”), Vincent J. Buonauro, Jr. (“Buonauro”), Robert S. Kondratick (“Kondratick”), Frederic H. Aaron (“Aaron”), PermaPave Industries, LLC (“PermaPave”), PermaPave USA Corp., PermaPave Distributions, Inc., Permeable Solutions, Inc., Verigreen, LLC, and Interlink-US-Network, Ltd. (“Interlink”) (collectively, the “Defendants”); and certain relief defendants (“Relief Defendants”). In the Permapave Complaint, the Commission alleged that, from 2006 to 2010, PermaPave and its affiliates raised more than $26 million from the sale of promissory notes and "use of funds" agreements to over 140 investors. The Commission further alleged that Aronson, Buonauro, and others told investors that there was a tremendous demand for the product - permeable paving stones - and that investors would be repaid from the profits generated by guaranteed product sales. In reality, there was little demand for the product, and Defendants used investors' money to make "interest" and "profit" payments to earlier investors and to fund management's lavish lifestyles. The Commission alleged that, shortly after an affiliate of PermaPave Industries acquired a majority stake in Interlink, Aronson, Aaron - who was the attorney for Aronson and the entity defendants and also an officer and director for several of the entity defendants - and others issued a press release stating that a company that had never heard of Interlink intended to invest $6 million in Interlink. See Complaint.
This action has since been resolved against all of the Defendants and Relief Defendants and the Commission and the U.S. Treasury hold approximately $60,000 in collections in the current matter and a related matter (SEC v. Ronald Feldstein, 12-cv-5715 (JSR) (S.D.N.Y.)) pending a determination as to whether or not a plan to propose to the Court a plan to distribute collections to harmed investors.
On October 8, 2021, the Commission notified investors by mail regarding a possible distribution in this matter (the “Notice”). See Form Correspondence. The Notice provides investors with the opportunity to communicate purported corrections to the Commission’s current calculations and/or any objections to the anticipated methodology for distribution. It also requires investors to complete and return a questionnaire to facilitate distribution if and when a distribution plan is approved by the Court. Corrections, objections, and the completed and signed questionnaire must be submitted by November 12, 2021 in accordance with the directions in the Notice.
The Notice references Exhibit 8 to the Declaration of Desiree M.C. Marmita in Support of Plaintiff’s Motion for Summary Judgment Against Defendants Eric Aronson and Fredric Aaron and Relief Defendant Caroline Aronson (ECF No. 100-8), which is available here.
For more information, please contact the Commission:
Office of Distributions