PHOENIX (CN) - Six people and 12 companies bilked investors of $12.4 million by claiming they could make money on FCC cellular spectrum licenses, the SEC said in a federal lawsuit Monday.
David Alcorn and Kent Maerki "orchestrated the offering fraud" through Janus Spectrum, a Glendale, Ariz.-based company they founded and managed, the SEC said.
One of their "misleading video" pitches was called "Money from Thin Air," the SEC said. But it was more like thin air in exchange for money.
Janus promised lucrative returns on investments in the Expansion Band and Guard Band portions of the 800 megahertz band, the SEC said.
In fact, the profit potential there is minimum, the SEC said, because it requires little bandwidth and is generally used for local services such as police or pizza delivery.
The SEC said in a statement that the defendants "allegedly engaged in the unregistered offer and sale of securities in violation of the federal securities laws and repeatedly lied to investors regarding the value and use of the FCC licenses."
All of the defendants spent most of the money on themselves, the SEC said.
Alcorn, 70, and Maerki, 72, both live in Scottsdale.
Also named as defendants are Dominion Private Client Group LLC; Janus Spectrum Group LLC; Spectrum Management LLC; Spectrum 100 LLC; Spectrum 100 Management LLC; Prime Spectrum LLC; Prime Spectrum Management LLC; Daryl G. Bank; Premier Spectrum Group, PMA; Bobby D. Jones; Innovative Group, PMA; Premier Group, PMA; Prosperity Group, PMA; Terry W. Johnson; and Raymon G. Chadwick Jr.
The SEC seeks disgorgement, penalties and injunctions.
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