Lawyer Sued in $2 Million SEC Complaint

     DENVER (CN) – Colorado investment manager Brian G. Elrod defrauded clients of $2 million in a promissory note scheme and his buddy, attorney Nova Dean Pack, referred nine of his 12 victims to him for a fee, the SEC claims in court.
     The SEC sued Elrod, 54, of Buffalo Creek, Colo., and Pack, 64, of Highland, Calif., in Federal Court.
     Elrod sold more than $2 million in bogus “guaranteed” high-yield promissory notes through his company, CFS Holding Co., the SEC says in the lawsuit.
     He failed to repay any of the principal, stopped paying interest after 5 months, and gave most of the money to himself, to “his wife, children, and relatives, to pay undisclosed commissions to Pack for referring investors and … to pay for Elrod’s miscellaneous personal expenses, including clothing, food, flowers, and jewelry,” according to the SEC.
     As for his co-defendant, the SEC says: “Although Pack, Elrod’s close friend, referred nine of the twelve investors in the CFS note offering to Elrod for a commission and otherwise participated in the offering, Pack has never been registered with the Commission as a broker or dealer, and has never been an associated person of a registered broker or dealer.”
     They promised 12 percent to 24 percent annual returns and sold $2,015,000 of the promissory notes, the SEC says in the complaint.
     It seeks disgorgement, penalties and an injunction.

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