U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23382 / October 8, 2015
Securities and Exchange Commission v. James L. Erwin and Joint Venture Solutions, Inc., Civil Action No. 2:14-cv-623 (D. Nev.)
SEC Obtains Default Judgment Against Las Vegas-Based Promoter of a Multi-Million Dollar Investment Scheme and His Company
The Securities and Exchange Commission today announced that the United States District Court for the District of Nevada entered default judgments against Las Vegas-based James L. Erwin and his corporate entity, Las Vegas-based Joint Venture Solutions, Inc., for violating the securities offering and broker-dealer registration provisions of the federal securities laws when they promoted a fictitious prime bank investment scheme. The Court granted the Commission's request for permanent injunctions against Erwin and Joint Venture Solutions, held them jointly and severally liable for disgorgement of ill-gotten gains and ordered them to pay civil penalties.
The SEC's complaint alleged that Erwin and Joint Venture Solutions violated the securities offering and broker-dealer registration provisions of the federal securities laws by promoting investments in Malom Group AG, a Switzerland based a company named with an acronym for "Make A Lot Of Money." The SEC alleged that Malom and its principals, who were separately charged in a related action, were behind a pair of advance fee schemes guaranteeing astronomical returns to investors in purported prime bank transactions and overseas debt instruments. The SEC's complaint also alleged that between 2009 and 2011 Erwin, through Joint Venture Solutions, promoted investments in Malom, offered Malom's securities to prospective investors, and acted as an intermediary between investors and Malom. Ultimately, the defendants' efforts induced at least five investors to pay Malom over $2.5 million to enter into agreements with Malom. The SEC alleged that while the Erwin and his company received commissions based upon a percentage of the amount of investor funds raised, the investors they recruited lost all of their invested funds.
Although the defendants answered the Commission's complaint and responded to discovery, their counsel withdrew after being served with the Commission's motion for summary judgment, which detailed the extensive evidence against Erwin and Joint Venture Solutions. On June 29, 2015, after defendants failed to respond to several Court orders, the Court struck the defendants' answer, entered default against them, and granted the Commission's motion for summary judgment as to both liability and remedies. The Court entered a final judgment on July 7, 2015. The Court granted the following relief against Erwin and Joint Venture Solutions: (1) permanent injunctions against future violations of the securities laws they violated; (2) permanent injunctions prohibiting them from participating in the issue, offer, or sale of any security, with the exception of purchases or sales made on a national securities exchange; (3) an order to disgorge, jointly and severally, $129,975 in ill-gotten gains together with prejudgment interest of $16,512.82, for total disgorgement of $146,487.82; and (4) an order that each of them pay a civil penalty of $146,487.82.
The SEC's investigation was conducted by Stephen Simpson and Angela Sierra, and the SEC's litigation was led by Mr. Simpson. The SEC appreciates the assistance of the Department of Justice, Federal Bureau of Investigation, and State Attorney's Office for the Canton of Zurich, Switzerland.
The SEC previously charged Malom Group AG, its principals, and agents with violating the antifraud and securities registration provisions of the federal securities laws in SEC v. Malom Group AG, et al, 2:13-cv-2280 (D. Nev. Dec. 16, 2013); SEC v. Smith, 1:14-cv-192 (D.N.H. May 2, 2014); and SEC v. Robinson, 2:14-cv-1036 (D. Nev. June 26, 2014). For additional information about these cases, see Litigation Release Number 22890 (Dec. 16, 2013); Litigation Release Number 22984 (May 2, 2014); Litigation Release Number 23032 (June 26, 2014).