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September 06, 2019 at 09:44 AM
The Securities and Exchange Commission on Aug. 28 filed charges and obtained an asset freeze against a San Diego-based firm and its principal for defrauding 50 retail investors out of $300 million tied to California alcohol license loans.
ANI Development LLC; its principal, Gina Champion-Cain; and a relief defendant were charged by the agency operating a multi-year scheme that since 2012 raised over $300 million, including over $100 million in the past year.
According to the complaint, when raising the investor funds, “defendants claimed to be offering investors an opportunity to make short-term, high-interest loans to parties seeking to acquire California alcohol licenses. In truth, that investment opportunity was a sham.”
Contrary to defendants’ representations, the SEC asserts, defendants did not use investor funds to make loans to alcohol license applicants.
Instead, Cain directed significant amounts of investor money to a relief defendant that she controlled.
Under California state law, liquor license applicants are required to escrow an amount equal to the license purchase price while their application remains pending with the state, the complaint states.
“Cain told investors that this regulatory requirement presented an investment opportunity,” the complaint states. “She directed investors to deposit their money into specified escrow accounts maintained by ANI Development, and represented to them that their funds were being loaned to liquor license applicants at a high interest rate.”
