U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23890 / July 28, 2017
Securities and Exchange Commission v. Cash Capital, LLC, America's Strategic Ore Properties, LLC, and Robert W. Wilson, No. 3:17-cv-01536-L-AGS (S.D. Cal. filed July 28, 2017)
Owner of Mining Exploration Companies Claiming Properties Worth $30 Billion Caught Using Investor Funds for Personal Expenses
The Securities and Exchange Commission today announced fraud charges against two purported mining exploration companies and their sole owner and manager in connection with an approximately $2 million offering fraud that targeted more than 70 non-accredited investors located primarily in Arizona and California.
The SEC's complaint alleges that, from approximately January 2015 to at least August 2016, Cash Capital, LLC, America's Strategic Ore Properties, LLC, and Robert W. Wilson told investors that the property underlying mining claims that Cash Capital had optioned contained more than 1.3 billion tons of graphite, graphene, and other ores, which he represented was worth over $18 billion and, later, $30 billion. Wilson also allegedly promised investors in Cash Capital and America's Strategic Ore Properties that their investments were secured by a lien on the more than $18 billion in assets of the companies.
The SEC alleges that none of these statements is true. Instead, Cash Capital, America's Strategic Ore Properties, and Wilson allegedly spent significant portions of investor funds on personal expenses, including the rent for his residence (as well as for a separate office), a membership to a massage spa, medical and dental expenses, frequent restaurant expenses, and payments to participants of previous investment offerings. None of these expenses allegedly related to the intended use of proceeds that Wilson had disclosed to Cash Capital investors. The complaint additionally alleges that Wilson took out more than $700,000 of investor funds in cash withdrawals and cashier's checks made to Wilson or his wife for which Wilson has no receipts to demonstrate that the funds were spent on the mining project.
The SEC's complaint, filed in the U.S. District Court for the Southern District of California, charges Cash Capital, America's Strategic Ore Properties, and Wilson with violating Sections 5(a) and (c) and 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 complaint also charges Wilson under Section 20(a) of the Exchange Act as a control person for Cash Capital's and Strategic Ore Property's violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The complaint seeks permanent injunctions, disgorgement and prejudgment interest, and civil penalties.
The SEC's investigation was conducted by Michael D. Hoke and supervised by Kurt L. Gottschall and Jason J. Burt of the Denver Regional Office. The SEC's litigation will be led by Gregory A. Kasper and Terry R. Miller.