SANTA ANA, Calif. (CN) - The CEO of Eagle Development Enterprises took more than $28 million from 500 investors for unregistered stock and membership interests, and used some of the money to go on paid tropical vacations, buy fancy cars and make a $45,000 contribution to the National Republican Congress, the SEC says in Federal Court.
Michael Bowen, 57, of Rancho Cucamonga, is president, CEO and director of Eagle Development Enterprises, Eagle Storage & Development, Eagle Housing & Development, and Eagle Helicopters & Aviation, all of which are named as defendants, along with Bowen.
Since 2003, Bowen and his unregistered sales agents have cold-called people and misrepresented Bowen's experience, Eagle companies' public offerings, projected returns, and the status' of the dying companies, the SEC says.
Bowen formed Eagle Storage in 2003 and bought a 40-acre property in Lake Havasu, Calif. to develop a storage facility. Despite promises of 8 percent annual returns, investors have received nothing, the SEC says.
Unbeknownst to investors, Bowen defaulted on a loan and the property was turned over to a court-appointed receiver in 2007.
Eagle Storage filed for bankruptcy on the eve of a foreclosure sale, forcing the lender to deal with bankruptcy court, the complaint states.
The SEC says Bowen also defrauded customers by misrepresenting a public offering through Eagle Development, which claimed to be developing a retirement center in Arizona.
Yet another fraudulent public offering came in 2008, when Bowen formed Eagle Aviation for the putative purpose of buying and selling helicopters, the SEC says.
Bowen sent investors "private placement memorandums" and other documents that falsely tracked the progress of the defunct companies, according to the complaint.
In October this, at least one investor was told that a 2007 plan to roll up two Eagle entities into one public offering in the United Kingdom would result in stock that traded at rates as high as $18 to $20 per share, the complaint alleges.
The phone number provided on Eagle Development's Website is disconnected.
The SEC seeks a restraining order, disgorgement and fines for unregistered sale of securities and fraud.
Subscribe to Closing Arguments
Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.