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Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony,

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From: scion6/3/2013 5:03:23 PM
   of 122033
 
SEC Charges Cincinnati Resident and Delaware Firm with Offering Fraud

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. lr-22712 / June 3, 2013

Securities and Exchange Commission v. Detroit Memorial Partners, LLC and Mark Morrow, Civil Action No. 1:13-cv-1817-WSD, United States District Court, Northern District of Georgia

SEC Charges Cincinnati Resident and Delaware Firm with Offering Fraud

On May 30, 2013, the Securities and Exchange Commission filed a civil injunctive action in the Northern District of Georgia against Detroit Memorial Partners, LLC ("DMP") and its managing member, Mark Morrow, a resident of Cincinnati, Ohio. The Commission alleges that Morrow caused DMP to issue approximately $19 million in fraudulent promissory notes and to sell $4.5 million in equity interests. DMP, which purported to be in the business of operating cemeteries, made material misrepresentations and omissions to investors who purchased the promissory notes and equity interests. Most significantly, DMP and Morrow misrepresented that it owned various cemetery properties and that the notes would be secured by those properties in Michigan. In fact, DMP did not own any cemetery properties and none of the notes were secured. Defendants also misrepresented that the proceeds from the notes would be used to acquire and manage cemeteries. In fact, significant amounts of the proceeds were used to fund Morrow's personal equity interest in DMP, for high risk trading in securities and to pay interest owed to other DMP note holders. Morrow also falsely told the equity investors that DMP was debt free, while knowing that DMP had incurred substantial obligations to the note holders.

The complaint further alleges that DMP failed to register the note offering with the commission in violation of the registration provisions of the securities laws.

The notes were sold by Morrow's long-time business associate Angelo Alleca through his investment advisory firm, Summit Capital. Alleca and Summit are the subjects of another lawsuit brought by the Commission charging them with operating a massive Ponzi scheme. See, SEC v. Alleca, et al., Lit. Rel. No. 22485 (Sept. 19, 2012)

According to the Commission's complaint, a total of approximately $19 million in DMP notes have been sold to at least 190 investors in multiple states. Substantial investor funds are missing and unaccounted for.

The Commission seeks an injunction against the Defendants to prevent further violations of the securities laws, disgorgement of their ill-gotten gains, civil penalties and interest.

SEC Complaint
sec.gov

sec.gov
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