Recovering Losses caused by Investment Misconduct

Utah "Venture Capitalist" Accused of Serial Securities Fraud

Utah-based company, Q-6 Associates, recently filed a lawsuit against Dwight Shane Baldwin, of Salt Lake City, in which Q-6 accuses Baldwin of being a serial fraudster. According to Q-6, Baldwin stole more than $1.5 million from the company and used the funds for his personal purposes. (For more about the lawsuit, read the Dec. 29, 2011 CourthouseNews.com post here.) Even worse, said Q-6, this wasn’t Baldwin’s first time to steal from investors.

In Dec. 2008, the Utah Division of Securities filed a Complaint against Baldwin and his company, SilverLeaf Capital Partners 1, LLC, in which the state alleged that Baldwin committed securities fraud through the fraudulent solicitation of hundreds of thousands of dollars from Utah investors. Baldwin allegedly asserted that the investors’ funds would be used to invest in the California-based GarageCo, Inc., and that investors would receive a return of principal plus profit within three to five months.

The Complaint further alleged that Baldwin "personally guaranteed" the investment to at least one investor, and told investors that they would receive an equity ownership in both GarageCo and Silver Leaf Capital for their investments. According to the State, the investors never received any of the allegedly promised profit or equity ownership.

Almost two years later, in June of 2010, the Utah Division of Securities issued a Stipulation and Consent Order against Baldwin and SilverLeaf Capital Partners 1, LLC. According to the Order, a state investigation uncovered misrepresentations and omissions made by Baldwin and his company in connection to a security offering. Though Baldwin and SilverLeaf Capital neither admitted to nor denied the findings, the Order was entered.

Utah prosecutors also charged Baldwin with two counts of theft and two counts of fraud in connection to the GarageCo. Inc investments. In June of 2010, Baldwin pled guilty to two counts of attempted theft, and promised to pay full restitution to the defrauded investors.

On Jan. 6, 2011, the Better Business Bureau officially revoked accreditation for SilverLeaf Companies, LLC, saying that "recent government action involving the business's customer relations … indicates a significant failure of the business to meet standards of conduct expected of a BBB member."

Neither the BBB’s revocation nor the civil and criminal charges of securities fraud stopped Baldwin for long, however. In a June 24, 2011 press release, Baldwin touted his "entrepreneurial accomplishment[s]," "business education," and financial experience. The release went on to applaud the successes of SilverLeaf Financial:

"Under Shane Baldwin's leadership, SilverLeaf Financial acquires both performing and non-performing first position CRE loans and converts them into legal tender. Since its establishment in mid 2008, SilverLeaf Financial has acquired over $500 million in face value notes from banks and other financial institutions across the nation."

In the release, SilverLeaf and Baldwin told investors worried about the current distressed loan market that their worries were unfounded. "Shane Baldwin and his team carefully analyze each loan to determine value prior to potential acquisition. Because of the extensive evaluation process the risk level of these types of investments is considerably lowered."

Shortly after the release was published, in August of 2011, a group of Nevada investors sued Baldwin in Nevada court for alleged misrepresentations about the ownership of a pool of foreclosed residential real estate properties. The lawsuit also alleged that Baldwin failed to disclose his prior securities fraud charges, a common allegation against serial fraudsters.

For information on how to spot a career criminal and serial fraudster, read Six Ways to Avoid an Investment Scam.

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