SEC Charges Former Pastor and His Wife with Operating an Affinity Fraud Targeting African-American Community
Litigation Release No. 24787 /April 3, 2020
Securities and Exchange Commission v. Teshuater LLC, Larry Donnell Leonard, II, Shuwana Leonard, and Teshua Business Group, LLC, Defendants, No. 4:20-cv-01187 (S.D. Tex., filed April 2, 2020)
The Securities and Exchange Commission announced today that it filed charges against Texas resident and former pastor Larry Donnell Leonard, II, his wife Shuwana Leonard, and two related entities for defrauding hundreds of retail investors.
The SEC's complaint alleges that the Leonards and two companies they control, Teshuater, LLC and Teshua Business Group, LLC, targeted investors in the African-American community with three separate fraudulent offerings, raising nearly $500,000 from over 500 investors across the United States. According to the complaint, the Leonards first sold bogus stock certificates in Teshuater, a company that bottled and sold alkaline water. Larry Leonard then allegedly tried to raise $20 million by selling a valueless cryptocurrency called TeshuaCoin, which he falsely claimed was backed by Teshuater's water products. Finally, the complaint alleges that Larry Leonard raised funds for a non-existent bitcoin mining investment, promising exorbitant returns, and then used the funds to make speculative options trades.
The SEC's complaint, filed in the United States District Court for the Southern District of Texas, charges the defendants with violating the antifraud 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 the Leonards and Teshuater with violating the registration provisions of Sections 5 of the Securities Act. The complaint seeks permanent and conduct-based injunctions, disgorgement of allegedly ill-gotten gains with prejudgment interest, and civil penalties.
The SEC's investigation was conducted by Jason A. Braun and Carol Hahn, and supervised by Jim Etri and Eric R. Werner. The litigation is being led by Jason Reinsch and supervised by B. David Fraser.