U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20850 / January 12, 2009
SEC v. Jarrod W. McMillin, et al., 07 CV 2636-REB-MEH (D. Colo.)
Judgments Entered Against Defendants Jarrod W. McMillin, Innovative Projects, Inc., and Laurence G. Young in Ponzi Scheme in Colorado
On Jan. 8, 2009, the Honorable Robert E. Blackburn, United States District Court for the District of Colorado, entered a final judgment against defendants Jarrod W. McMillin and Innovative Projects, Inc. The final judgment finds McMillin and Innovative Projects, Inc. jointly and severally liable for disgorgement in the amount of $673,983 representing profits from the conduct alleged in the Commission's complaint plus pre-judgment interest of $19,349, for a total of $693,332. The Judgment also finds McMillin liable for a civil penalty in the amount of $130,000.
On December 22, 2008, the Court entered a default judgment against defendant Laurence G. Young in the same case. The default judgment finds Young liable for disgorgement in the amount of $282,103 representing profits from the conduct alleged in the complaint, prejudgment interest of $16,698, and a civil penalty of $282,102, for a total of $580,903.
The Commission's complaint alleged that McMillin and Young were part of a Ponzi scheme known as American Investors Network or AIN. AIN solicited funds to finance an advertising program and promised to return monthly profits of $10,000 to $20,000 on each $2,000 investment. The advertising interests were investment contracts which are securities under federal law. Among other claims, the complaint alleged there was no advertising program and that investors who received "profit" distributions were paid with funds solicited from other investors. The complaint also alleged that McMillin and Young acted as unregistered broker-dealers in connection with the offer and sale of securities.
The Court previously entered permanent injunctions restraining McMillin, Young, and Innovative Projects, Inc., from violating Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Section 10(b) the Exchange Act of 1934 ("Exchange Act") and Rule 10b-5. The injunctions also restrained McMillin and Young from violating Section 15 of the Exchange Act.
[SEC v. Jarrod McMillin et al., Civil Action No. 07-CV-2636-REB-MEH, USDC, D. Colo.] For further information, see Release No. 20415 (Dec. 21, 2007).
