U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 24001 / December 4, 2017
Securities and Exchange Commission v. Donald E. MacCord, Jr., et al., Civil Action No. 2:17-cv-1809 (W.D. Wa., filed Dec. 4, 2017)
Digital Display Advertising Firm, Executives Bilk More than $2 Million from Investors
The Securities and Exchange Commission today charged a Seattle-area based outdoor digital signage advertising company and two of its senior executives with stealing more than $2 million from retail investors.
According to the SEC's complaint filed in U.S. District Court in Seattle, Digi Outdoor Media Inc.'s former chief executive officer, Donald MacCord Jr., and its chief financial officer, Shannon Doyle, raised nearly $4.5 million in promissory notes by claiming they would use investor money to construct and install digital signs for commercial advertising around Washington, D.C. Instead, the complaint alleges that MacCord and Doyle secretly diverted millions of dollars of investor money for their own personal use, including MacCord's luxury cars, $20,000 per month rent on a Southern California mansion, nanny and housekeeping services, and private school tuition for his children, while Doyle diverted several hundred thousand dollars to his other unrelated businesses.
The SEC's complaint further alleges that MacCord and Doyle tried to hide their theft by creating fake invoices and sham loans to justify the money they took. They then encouraged investors to convert their promissory notes to common stock, provided forged leases to Digi's independent auditor, and filed false financial statements with the Commission in an attempt to take the company public rather than pay off their outstanding debt to their investors.
The SEC's complaint charges MacCord, Doyle and Digi with violating the anti-fraud provisions of 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 complaint also charges MacCord and Doyle with violations of Exchange Act Rule 13b2-2. The SEC seeks permanent injunctions, disgorgement of ill-gotten monetary gains plus interest and penalties, along with officer-and-director and penny stock bars.
The U.S. Attorney's Office for the Northern District of California announced criminal charges against MacCord and Doyle for conspiracy to commit wire fraud, submitting false writings to a government agency, obstruction of official proceedings, and destruction, alteration or falsification of records in federal investigations, and against Doyle for conspiracy to commit wire fraud and obstruction of official proceedings.
The SEC's investigation has been conducted by Justin M. Lichterman and Michael Foley of the San Francisco Office and supervised by Tracy Davis. The litigation is being conducted by Robert Tashjian and Jason Habermeyer and supervised by Susan LaMarca. The SEC appreciates the assistance of the the U.S. Attorney's Office for the Northern District of California, the FBI, and the Financial Industry Regulatory Authority.