The Securities and Exchange Commission has charged a man and a firm based in Boca Raton Florida, with allegedly defrauding more than 20 investors of approximately $2.1 million.
David Kusher and his firm La Mancha are accused of misrepresenting how investors’ funds would be used in private securities offerings related to short-term loans for professional athletes and sports agents, among others, including current and former NFL players.
The SEC’s complaint says that approximately $10.5 million was raised from investors through a series of LLCs set up by Kushner and La Mancha, but it alleges that hundreds of thousands of dollars in undisclosed “fees” were charged out of the intended loan proceeds.
The agency further accuses Kushner and his firm also used almost $1.5 million in loan repayments that should have been paid to investors to pay personal expenses such as personal credit card bills, college tuition, country club dues, a luxury vacation, a Mercedes Benz, and a rental home in the Hamptons.
“As we allege, Kushner lied to investors and simply stole the money that would have given them at least some of the investment returns he had promised,” said Sheldon L. Pollock, Associate Director of the SEC’s New York Regional Office. “The Commission continues to scrutinize private investment opportunities where defendants fail to follow through on their commitments to investors.”
The SEC is seeking a permanent injunction, disgorgement plus prejudgment interest, and civil monetary penalties, as well as a conduct-based injunction and an officer-and-director bar against Kushner. Criminal charges have also been filed against Kushner.
The allegations have not been proven in court and the defendants are presumed innocent until found guilty in a court of law.
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