FOR IMMEDIATE RELEASE
Contact: Catherine Lu
(702) 486-6982 / 334-7953
(Carson City, NV; June 18, 2013) —A Reno man who fraudulently swindled eight victims out of more than a million dollars in part through a speculative energy investment scheme landed a 10-year prison sentence. The recent sentencing and increased demands in energy independence globally point to a national trend in investors and con artists alike promoting traditional and alternative energy resource investment, warns Nevada Secretary of State Ross Miller.
Jack Albert Schwartz, 69, promised several investors that his business Tahoe Venture Partners, LLC would invest in a start-up company that utilized innovative technologies to reduce energy costs and garner huge returns on investment. Investigators say Schwartz deposited investments in his companies’ accounts but used it for non-business expenses, including mortgage and credit card payments and deposits in his ex-wife’s account. He allegedly never turned over any of the investors’ money, investments ranging from $30,000 to $200,000, to the start-up companies or paid any return to any of the investors. Schwartz was charged with five felony counts of securities fraud and 10 felony counts of theft.
In an investor advisory, the Secretary of State Securities Divisions explains the most common ways energy investment products may be offered, why investors need to be cautious and how investors can protect themselves when considering investments in traditional or alternative energy offerings. The advisory is available here.
“Many of these investments are highly risky and illiquid and therefore are not appropriate for many investors,” said Miller. “It is not unusual for unscrupulous promoters to use the lure of current events or innovative technologies to take advantage of unsuspecting investors by engaging in fraudulent practices.”
Miller said promoters sometimes prey on investors interested in socially responsible products by labeling them as “green energy” investment opportunities. The phrase “green energy” implies that the products are ecologically friendly. In some cases, the promoters may be operating a fraudulent shell company and not producing anything.
The Secretary of State’s Securities Division issued a cease and desist order in 2011 to GTec Biofuels, Inc., a “green energy” company that sold unregistered securities in Nevada. GTec advised potential investors that certain shareholders could receive dividends of “10% of the company’s net profit” paid quarterly. Following the cease and desist order, GTec Biofuels folded up its known operations.
A copy of the criminal complaint is available by clicking here, and the judgement of conviction is available by clicking here.
According to the most recent enforcement survey by the North American Securities Administrators Association, of which the Nevada Secretary of State’s office is a member, oil and gas investments were the fourth most common product at the heart of state securities enforcement cases, with about 40 percent of responding jurisdictions reporting energy-related enforcement cases.
Miller says many of the warning signs related to questionable investments apply to not just energy-related investments, but virtually all investments:
- Avoid any company that guarantees large profits with little or no risk.
- Be wary of high pressure tactics designed to get you to transfer cash in any manner to those soliciting you.
- Be skeptical of unsolicited phone calls, mail or email regarding investments with
companies with which you are unfamiliar.
- Get all possible information about the company, and verify that data with a source or advisor you know you can trust.
- Be sure you thoroughly understand the fees and commissions charged, and the basis for those charges.
- Prior to purchasing, contact the United States Commodity Futures Trading Commission (www.cftc.gov), or the Nevada Secretary of State’s office (www.nvsos.gov).
- If in doubt, don’t invest. If you cannot get solid information about the company or its agents, don’t risk you money.
For more information about the risks associated with energy investments, contact the Nevada Securities Division at (702) 486-2440 or (800) 758-6440, or by visiting the Securities Center on the Secretary of State’s website at www.nvsos.gov.
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Jack Schwartz booking photo.