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U.S. Securities and Exchange Commission

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 23725 / January 24, 2017

Securities and Exchange Commission v. Dwayne Edwards, et al., Civil Action No. 17-cv-393 (ES) (D.N.J., filed January 20, 2017)

SEC Announces Fraud Charges, Asset Freeze in Alleged Nursing Home Investment Scheme

The Securities and Exchange Commission today announced fraud charges and an emergency asset freeze obtained against a businessman in South Carolina accused of siphoning funds he raised from investors for the purpose of purchasing or renovating senior housing facilities.

The SEC alleges that Dwayne Edwards improperly commingled money from several different municipal bond offerings and the revenues of the facilities underlying the offerings. The offerings were each supposed to finance a particular assisted living or memory care facility in Georgia or Alabama. From the commingled funds, Edwards allegedly diverted investor money for personal use as well as to finance other unrelated bond offerings. The Commission's complaint alleges that Edwards and certain borrower entity defendants violated 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 SEC's complaint, filed January 20 in federal district court in Newark, N.J., also charges Edwards' former business partner Todd Barker, who agreed to a bifurcated settlement with monetary sanctions to be determined at a later date, with violations of aiding and abetting both Edwards' and the borrower defendants' violations.

The court issued an order at the SEC's request freezing the assets of Edwards and certain relief defendants. The court also appointed a temporary receiver over the facilities.

The SEC's litigation against Edwards, Barker, and the borrower defendants will take place in federal court in Newark, N.J.

The SEC's investigation, which is continuing, is being conducted by Lee A. Greenwood, David H. Tutor, Kerri L. Palen, and Sandeep Satwalekar. The case is being supervised by Lara S. Mehraban, and the litigation is being handled by Mr. Greenwood, Mr. Tutor, Neal Jacobson, and Alexander Vasilescu.

SEC Complaint

 

http://www.sec.gov/litigation/litreleases/2017/lr23725.htm


Modified: 01/24/2017