The Securities and Exchange Commission has barred former Securities America broker and certified public accountant Ronald J. Roach for his role in a Ponzi scheme that defrauded investors of about $1 billion.
In October, Mr. Roach pleaded guilty to the fraud and securities violations stemming from the sale and leaseback of mobile solar electrical generators. He is scheduled to be sentenced in the criminal case on Jan. 28, and faces a maximum of 10 years in prison.
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According to the SEC, Mr. Roach was associated with a company, DC Solar, which solicited investors by claiming that there were very favorable federal tax benefits associated with investments in alternative energy.
The company structured transactions in order to maximize the tax benefits to the investors, who would buy the solar generators without taking possession of them. Investors would pay a percentage of the sales price, finance the balance with the company, and then lease the generators back to the company, which in turn would lease them to third parties. A portion of the lease revenue would be used to pay the investors' debts to the company and to the investors. The third-party leases, however, generated little income and the company paid early investors with funds contributed by later investors.
In its criminal case, the U.S. Attorney's Office said that Mr. Roach, of Walnut Creek, Calif., prepared years of financial statements that falsely characterized investments to purchase the solar generators as revenue earned from their rental. He and his co-conspirators, the government said, used those fraudulent financial statements to hide from investors the company's use of later investor payments to pay financial obligations the company made to earlier investors.
Mr. Roach was discharged by Securities America on Oct. 23, the day after he pleaded guilty to the fraud and securities violations charges.