SEC Charges Gina Champion-Cain, ANI, and ANI Development with Securities Law Violations in Alleged $300 Million SchemeSaturday, September 28, 2019
According to an SEC Complaint, since 2012, Gina Champion-Cain and ANI Development, an entity she controls, have raised over $300 million, including over $100 million in the past year, from approximately 50 investors nationwide. She claimed to be offering investors an opportunity to make short-term, high-interest loans to parties seeking to acquire California alcohol licenses. According to the complaint, the investment opportunity was a sham.
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. Cain told investors that this regulatory requirement presented an investment opportunity. 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.
Cain allegedly provided investors with a list of purported pending applications, from which investors selected the license application that they wished to fund. She also provided investors with escrow agreements, ostensibly executed between ANI Development and its escrow company, which provided that investors’ principal would be kept safe in an escrow account, and that once the underlying liquor license had become final, would then be returned to the investors with interest. According to the SEC, these representations were materially false and misleading, and ANI Development’s stated business – financing the transfer of liquor licenses with money it was raising from investors for an investment profit – was wholly illusory.
First, the lists of pre-selected liquor license applicants allegedly contained largely cancelled or expired liquor licenses, and many of the license applicants whom ANI Development told investors they were funding had never heard of ANI Development, much less taken a short-term loan from ANI Development. Second, the escrow agreements that Cain and ANI Development provided to their investors were allegedly fabricated. The escrow agreements were not executed by the escrow company’s representatives, had never been seen by its executives, and contained the forged signatures of its escrow officers. Third, according to the SEC, the real escrow agreements governing the escrow accounts – which defendants concealed from their investors – gave ANI Development and Cain complete discretion and control over the deposited investor funds. With that control, defendants allegedly transferred significant amounts of investor funds to American National Investments, the corporate parent of ANI Development.
The SEC believes ANI Development currently owes its investors over $120 million and just $11 million remains in ANI Development’s escrow account. According to the complaint, Cain and ANI have violated SEC laws. The SEC seeks a preliminary injunction that, among other relief, appoints a permanent receiver over ANI Development, American National Investments, and all of their subsidiaries and affiliates. The SEC also seeks permanent injunctions prohibiting future violations of the federal securities laws, and an order requiring the defendants to the lawsuit to disgorge their ill-gotten gains, along with prejudgment interest, and imposing civil penalties on defendants.
If you invested money with Cain’s alleged ANI scheme, we may be able to help you recover. Call us today at 1-877-410-8172 for a free consultation. Since 1998, the attorneys at ChapmanAlbin have helped investors recover money lost due to investment fraud and other misconduct.