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U.S. Securities and Exchange Commission

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 23811 / April 25, 2017

Securities and Exchange Commission v. Matthew A. Krimm, et al., Civil Action No. 1:17-cv-00464

SEC Charges Former Mortgage Loan Officer with Securities Fraud

The Securities and Exchange Commission today charged Matthew A. Krimm, a former mortgage loan officer, with defrauding investors, including mortgage loan customers of his former employer.

The SEC's complaint, filed in federal court in Wilmington, Delaware, charges Krimm and the company he owned, Krimm Financial Services, LLC (KFS), with fraudulently inducing at least 25 investors to invest more than $1.69 million with Krimm and KFS in an unregistered offering of promissory notes. The complaint alleges that Krimm and KFS falsely claimed that they owned and operated their own highly successful mortgage loan business. The complaint also alleges that Krimm and KFS deceived investors by providing them with misleading offering documents, false income statements and false revenue and profit projections, all of which gave the false impression that KFS was operating a profitable business. According to the complaint, Krimm and KFS also falsely claimed that the monies raised would be used by KFS to expand its mortgage loan business, including opening new offices, hiring new loan officers and expanding its reverse mortgage lending business. The complaint alleges that, contrary to what investors were told, Krimm and KFS operated no mortgage lending business of their own, and they used over 75% of the money from new investors to pay Krimm's personal expenses and to pay back prior investors to maintain the appearance that KFS was performing profitably.

In a parallel action, the Investor Protection Unit of the Delaware Department of Justice today announced criminal charges against Krimm.

The SEC's complaint alleges that Krimm and KFS violated the antifraud provisions of the securities laws in Section 17(a) of the Securities Act of 1933 (Securities Act), and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, as well as the securities registration provisions in Sections 5(a) and 5(c) of the Securities Act. The Commission's complaint seeks permanent injunctions, return of allegedly ill-gotten gains with prejudgment interest, and civil penalties.

The SEC's investigation, which is continuing, has been conducted by Patricia A. Kuzma Trujillo and Kingdon Kase of the Philadelphia Office, and was supervised by G. Jeffrey Boujoukos. The SEC's litigation will be led by Christopher R. Kelly and Julia C. Green. The SEC appreciates the assistance of the Investor Protection Unit of the Delaware Department of Justice.

SEC Complaint

 

http://www.sec.gov/litigation/litreleases/2017/lr23811.htm


Modified: 04/25/2017