Spokane Valley Man, Daniel F. Peterson, Charged with Scheming to Raise
Money Under Guise of JOBS Act
A Spokane Valley man and his company have been charged with misleading
investors with claims that the Jumpstart Our Business Startups (JOBS)
Act would enable them to raise billions of dollars in a “secured”
product that the SEC says doesn’t exist.
According to an April complaint, Daniel F. Peterson sold common stock in
his company, USA Real Estate Fund 1, from November 2010 to June 2012 to
more than 20 investors.
In his solicitations, Peterson allegedly told investors he was preparing
to offer a second “secured” product backed by two prominent
Wall Street financial firms that would render profits of as much as 1,300
percent over 10 years.
Peterson allegedly used the JOBS Act to entice investors, saying the Act
would enable him to raise billions of dollars by advertising his product
to the general public.
The SEC has alleged that Peterson’s representations were false. According
to the complaint, he had neither a guaranteed investment product nor any
reasonable basis for his projected returns. He also allegedly didn’t
have affiliations with any financial firm to underwrite his purported
offering. SEC officials also have stated that Peterson misappropriated
investor funds for his personal use, including to rent a Mercedes Benz
SUV and to purchase clothes for friends and luggage for his wife.
The SEC warned investors against the alleged scheme earlier this week,
saying it fears Peterson will continue to solicit new investors. Peterson
“may be preparing to tout the offering through investor seminars
and public advertising,” the Commission said on Thursday.
“We’ve brought this court action to stop Peterson’s fraud
in its tracks before it picks up more steam,” said Michael S. Dicke,
Associate Director in the SEC’s San Francisco Regional Office. “The
JOBS Act is intended to help small businesses raise capital, not to legalize
fraud or give unscrupulous entrepreneurs a right to make false claims
to fleece investors.”