Clarence "Dean" Alford, a businessman and former Georgia legislator has consented to settle the U.S. Securities and Exchange Commission's (SEC) securities fraud claim that he deceived investors out of $23 million using a false clean energy project.
The former five-term state representative didn't confirm nor deny the authorities' allegations filed in a Georgia federal court. Nonetheless, he agreed to a permanent injunction banning him from fraudulent securities offerings.
The court will determine whether Mr. Alford must pay civil penalties and how much of his supposedly ill-gotten gains should be disgorged.
Alford Misappropriated Funds from over 100 Investors
The SEC claims that Mr. Alford misappropriated between $25,000 and $825,000 from each of 100 predominantly Indian-American investors for a project he alleged would convert Augusta landfill waste into fuel. In reality, he allegedly spent the money on personal debts and other assets.
Alford Accused of Misleading Investors with False Promises
The SEC alleges that, between 2017 and 2019, Mr. Alford knowingly overstated the success of his business, Allied Energy Services LLC, to scam investors with promises of high returns. He supposedly lied to investors about holding their funds in escrow and being associated with other companies on the Augusta landfill project and separate solar energy developments.
Investors were also promised yearly return rates of between 12% and 34% and were given fake financial statements claiming Allied had $162 million in assets and annual revenues of up to $34 million.
According to the SEC, the company's assets did not surpass $1 million, and it generated less than half that in 2018.
40 Individuals and Investors Made Claims Against Alford
Based on the reports, in October of last year, roughly 40 individuals and investors sued Mr. Alford and his associates over the failed Augusta project in Georgia federal court.
Throughout the investigation, the Commission discovered Mr. Alford had transferred approximately $5.8 million of investor funds into his personal bank accounts and spent most of it on luxury goods, credit card bills, and contributions to political campaigns.
The SEC also explained that the businessman used roughly $1.5 million of investors' funds to finance an unrelated food distribution venture, transferred $784,000 to a different company he owns, and spent about $7.6 million paying old Allied debts.
Authorities state that the scheme "collapsed" in 2019 when Mr. Alford missed interest payments and couldn't repay investors.
Alford Hid Investment Scheme from Company
According to the complaint, the company received approval in 2018 from the Augusta Economic Development Authority to issue up to $68 million in industrial revenue bonds to finance the Augusta landfill clean energy project, but no bonds were sold.
More so, the SEC explained that Allied hasn't been operational since November of 2019 and that Mr. Alford hid his investment scheme from the company's CFO.
Speak with a Securities Fraud Attorney
Dimond Kaplan & Rothstein, P.A. has vast experience with cases related to securities fraud schemes. The firm has successfully represented numerous securities fraud victims who have lost money as a result of securities schemes throughout the country and recovered losses for clients.
Contact Dimond Kaplan & Rothstein Today
To learn more about your rights and options, contact an experienced securities fraud attorney at Dimond Kaplan & Rothstein, P.A. to schedule an appointment for a FREE case evaluation.
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