(CN) – A Florida company bilked foreign investors out of over $6 million with promises that their investments would qualify them for a U.S. visa and eventually a green card, federal regulators claim in court.
In a complaint filed Dec. 28 in the federal court in Miami, the Securities and Exchange Commission says AJN Investments LLC and its CEO, Jason Adam Ogden, made about $6.7 million between October 2011 and April 2015, by luring 14 foreign investors with promises they would qualify for the EB-5 visa program.
Congress created the EB-5 Immigrant Investor Pilot Program in 1990 to stimulate the U.S. economy by creating jobs through foreign investment.
The EB-5 immigrant investor program provides a path to permanent residency for foreign investors who invest in a commercial enterprise that creates at least 10 jobs for American workers, the complaint says.
The SEC claims AJN Investments was created to finance franchise stores for Juiceblendz International Inc. and Yoblendz International LLC, which were controlled by Ogden.
According to the complaint, Ogden provided investors with a confidential agreement specifying that the $550,000 they paid as a subscription fee would be used to create and operate Juiceblendz and Yoblendz stores in strip malls.
The frozen yogurt stores would generate jobs, and produce a 5. percent return and other cash distributions.
The agreement also stated that each investor would be able to consult and get advice from the managing member regarding the location of the store and its financial performance.
However, in late 2013, due to a decline in the frozen yogurt market, Ogden changed AJN’s original business plan without updating the offering materials, built less expensive kiosks and provided investors with a false economic analysis, the SEC says.
According to the government, Ogden used investors’ funds for “funding lawsuit settlements and loans unrelated to AJN, paying management fees to Seekem Inc., and funding AJN payroll and other operating expenses.”
Ogden is alleged to have converted over $1 million of the investors’ monies for his own use, spending it on meals, entertainment, and to repay a personal loan.
“Ogden’s control over all involved entities – AJN, Seekem, Juiceblendz and Yoblendz – allowed him to move money around as he saw fit without question,” the SEC says.
In August 2016, Ogden stopped all the operations for AJN, Yoblendz and Juiceblendz in order to resolve a private arbitration, and transferred all of his shares to a third party.
The SEC is seeking to permanently enjoin AJN and Ogden from violations of the Exchange Act and the Securities Act.
The SEC is represented by in-house attorney Timothy Evans of Fort Worth, Texas.
Courthouse News was unable to contact AJN Investments LLC due to inactive contact information.