⚠️ The Big Play
In August 2020 and June 2021, Randy Miller's nonprofit, Legacy Cares, managed to raise a whopping $284 million through municipal bonds issued by an Arizona state entity. The goal? To finance a multi-sports park and family entertainment center in Mesa, Arizona. Investors were shown financial projections that promised multiple times the revenue needed to cover their payments. Sounds like a win-win, right? Not quite.
🤥 The Deception Game
The SEC alleges that Randy Miller, Chad Miller, and Jeffrey De Laveaga fabricated or altered key documents to paint a rosy picture of the sports complex's financial future. They allegedly cooked up letters of intent and contracts with sports clubs and leagues, making it seem like the complex would be bustling with events and packed stands. But when the venue opened in January 2022, reality hit hard. The number of events and attendees was far below expectations, leading to a revenue shortfall of tens of millions of dollars. By October 2022, the bonds had defaulted.
🏛️ The Legal Blitz
“As our complaint alleges, these defendants used fake documents to deceive municipal bond investors into believing a sports complex would generate more than enough revenue to make payments to bondholders,” said Antonia Apps, Acting Deputy Director of the SEC's Division of Enforcement.
The SEC's complaint, filed in the U.S. District Court for the Southern District of New York, charges the trio with violating antifraud provisions of federal securities laws. They're looking for permanent injunctions, conduct-based injunctions, disgorgement with prejudgment interest, and civil penalties. Meanwhile, the U.S. Attorney’s Office has also announced criminal charges for similar conduct.
🔍 The Investigation Continues
The SEC's probe was led by a team of dedicated investigators and supported by the U.S. Attorney’s Office and the FBI. The investigation isn't over yet, so we can expect more details to emerge as the case unfolds.
