The U.S. Securities and Exchange Commission (SEC) is seeking $10.3 million from defunct Silverleaf Financial LLC. The founder, Dwight Shane Baldwin, is accused of bilking investors out of money raised to purchase defaulted property loans in Florida and Colorado.
SEC Seeking Permanent Injunction & Disgorgement
The SEC is seeking $8 million in disgorgement from Silverleaf and $2.3 million in interest. Baldwin is culpable for the same $8 million in disgorgement but only liable for $1.1 million in interest, which stopped accruing on Oct. 12, 2017. He was ordered to pay $1.1 million as part of a consent agreement with the SEC in which he neither admitted nor denied the allegations.
According to the filings, the SEC requested a permanent injunction prohibiting the company from committing future securities law violations and asked that it be ordered to pay unspecified civil penalties.
Silverleaf Raised Money Under False Pretense
In 2015, the SEC named Baldwin and Silverleaf as co-defendants in a case alleging a fraudulent offering scheme. The agency says the scheme ran from at least June 2010 through late 2011.
According to the complaint, Baldwin raised roughly $8 million for Silverleaf from at least three investors meant to buy discounted, defaulted commercial real estate loans—one collateralized by property in Oviedo, Florida, and the other collateralized by a resort in Steamboat Springs, Colorado.
The SEC says Baldwin told prospective investors that there was little to no risk, and claimed they would get returns of as much as 10 percent within 30 days. Instead of paying returns to investors, Baldwin used investors’ money to repay debts and deposited the rest into various Silverleaf bank accounts.
The SEC said Baldwin lied to investors, telling them he needed $2 million to purchase the loan for the property in Oviedo, even though he already sold a Florida loan connected with that property. In the case of the Colorado loan, Baldwin raised $6 million from investors, telling them he had a buyer for the loan when none existed.
According to the SEC, none of the investors have received returns on their investments.
Have You Lost Money in an Investment Scheme?
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If you are looking for an investment fraud attorney to review your rights and options, the investment fraud lawyers at Dimond Kaplan & Rothstein, P.A. have recovered more than $100 million from banks and brokerage firms for their wrongful actions.