SEC Charges Three with Orchestrating a Fraudulent Public Shell Company Scheme
This week, the Securities and Exchange Commission announced fraud charges against a Florida-based CPA, a former broker, and his spouse, for their roles in a fraudulent scheme involving the creation and sale of a public shell company and false regulatory filings to facilitate the sale.
According to the SEC, David Dreslin and Michael Toups created a shell company, Anglesea Enterprises, Inc., by filing false and misleading registration statements and periodic reports with the SEC, creating a phony business plan, and appointing nominal officers and directors to conceal their control over the company. The goal of the alleged scheme was to sell Anglesea in a reverse merger for profit. The SEC also alleges that Leslie Toups served as Anglesea’s majority shareholder and director and signed filings and other documents that contained materially false and misleading statements and omissions over a multiyear period.
The SEC’s complaint, filed in Tampa, Florida, charges:
- Dreslin, Michael Toups, and Leslie Toups with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and aiding and abetting Anglesea’s filing of false SEC reports, in violation of Section 13(a) of the Exchange Act and Rules 12b-20, 13a-1, and 13a-11
- In the alternative, that Dreslin and Michael Toups violated the antifraud provisions of Section 10(b) of the Exchange Act and Rule 10b-5 through or by means of others, in violation of Section 20(b) of the Exchange Act
- Dreslin with aiding and abetting false statements to Anglesea’s auditor in violation of Exchange Act Rule 13b2-2, and aiding and abetting Anglesea’s violation of Rule 13a-13 under the Exchange Act
- Leslie Toups with failing to file required reports in violation of Section 16(a) of the Exchange Act and Rule 16a-3 thereunder.
The SEC seeks injunctions, civil penalties, and penny stock and officer-and-director bars from Dreslin, Michael Toups, and Leslie Toups, and disgorgement plus interest from Dreslin.
Without admitting or denying the SEC’s allegations, Leslie Toups agreed to settle the SEC’s charges against her by agreeing to be barred, for five years, from serving as an officer or director of a public company or participating in a penny stock offering, to pay a $25,000 penalty, and to permanent injunctions against violating the charged provisions of the federal securities laws. The settlement is subject to court approval.
Michael Toups, the CFO of a China-based Chinese fuel storage company, was previously charged by the SEC with fraud in 2016 for issuing periodic filings and press releases that substantially overstated the company’s storage capacity at three fuel storage depots in China. The SEC’s litigation against Toups is ongoing.
The SEC’s Retail Strategy Task Force and Office of Investor Education and Advocacy (OIEA) encourage investors to check the background of anyone selling or offering them an investment using the free and simple search tool on Investor.gov. Investors can also use the SALI feature to find information about certain people who have had judgments or orders issued against them in SEC court actions or administrative proceedings.
The SEC’s investigation was conducted by Jeffrey D. Felder and Daniel M. Konosky, and was supervised by Kimberly L. Frederick and Kurt L. Gottschall. The SEC’s litigation against Dreslin and Michael Toups will be led by Mark L. Williams and supervised by Gregory Kasper.
Learn more HERE.