Gina Champion-Cain Allegedly Operated a $300 Million Nationwide Sham Investment Fraud Scheme, Including over $100 Million in the Past Year Alone
Gina Champion-Cain, age 57, and a resident of San Diego, California, allegedly raised over $300 million, including over $100 million in the past year, from approximately 50 investors nationwide, according to an SEC Complaint filed in the U.S. District Court Southern District of California under review by investor rights attorney Alan Rosca.
Investor rights attorney Alan Rosca, of the Rosca Scarlato LLC law firm, is investigating activity related to Gina Champion-Cain’s alleged sham investment fraud scheme. The firm would like to talk to investors, and those who believe they may have lost money in activity related to Gina Champion-Cain’s alleged sham investment fraud scheme are encouraged to contact attorney Alan Rosca with any useful information or for a free, no obligation discussion about their options.
Gina Champion-Cain’s Alleged Fraud Scheme Purportedly Offered Investors Opportunities to Lend to Parties Seeking to Acquire California Alcohol Licenses
Gina Champion-Cain, when raising the aforementioned investor funds, allegedly made statements to defendants which claimed to be offering investors an opportunity to make short-term, high-interest loans to parties seeking to acquire California alcohol licenses, the SEC Complaint reports.
In reality, however, the supposed investment opportunity was a sham, the Complaint details.
The SEC reports that, under California state law, liquor license applicants are required to escrow an amount equal to the license purchase price while their application remains pending with the State. Cain allegedly made statements to investors that this regulatory requirement presented an investment opportunity, the SEC Complaint reports.
Cain, according to the SEC Complaint, allegedly directed investors to deposit their money into specified escrow accounts maintained by ANI Development, and purportedly represented to them that their funds were being loaned to liquor license applicants at a high interest rate.
Cain also allegedly represented that those applicants would in turn use those now-escrowed funds to meet California’s escrow requirement, the SEC notes.
Champion-Cain is the founder and CEO of American National Investments, Inc., a real estate development company that has over 40 affiliated businesses, including ANI Development, LLC, the SEC states.
ANI Development, LLC, is a California limited liability company located in San Diego, and the entity’s managing member is Cain, and it is an affiliate of American National Investments, Inc., the SEC reports.
It is important to note that the SEC Complaint also lists ANI Development, LLC and Relief Defendant American National Investments, Inc. as Defendants in the case as they both reportedly have their principal places of business in this district, the SEC notes.
Cain Allegedly Provided Investors with a Supposed List of Pending Applications from which Investors Selected the License Application They Wished to Fund
Gina Champion-Cain allegedly provided investors with a purported list of pending applications, from which investors selected the license application that they wished to fund, according to the aforementioned SEC Complaint.
Cain also allegedly provided investors with escrow driver updater software agreements, ostensibly executed between ANI Development and its escrow company, which provided that investors’ principal would be kept safe in an escrow account, and that once the underlying liquor license had become final, would then be returned to the investors with interest, the Complaint states.
The aforementioned representations were allegedly materially false and misleading, and ANI Development’s stated business – financing the transfer of liquor licenses with money it was raising from investors for an investment profit – was wholly illusory, the SEC Complaint reports.
Cain’s Supposed Lists of Pre-selected Liquor License Applicants Allegedly Contained Largely Cancelled or Expired Liquor Licenses
Gina Champion-Cain allegedly provided the lists of pre-selected liquor license applicants which contained largely cancelled or expired liquor licenses, and many of the license applicants whom ANI Development told investors they were funding had never heard of ANI Development, much less taken a short-term loan from ANI Development, according to the SEC Complaint.
Furthermore, the escrow agreements that Cain and ANI Development allegedly provided to their investors were fabricated, and the escrow agreements were not executed by the escrow company’s representatives, had never been seen by its executives, and contained the forged signatures of its escrow officers, the SEC notes.
Third, the real escrow agreements governing the escrow accounts – which defendants concealed from their investors – gave ANI Development and Cain complete discretion and control over the deposited investor funds, the SEC states.
With said control, the defendants allegedly transferred significant amounts of investor funds to Relief Defendant American National Investments, the corporate parent of ANI Development, the SEC reports.
The consequences of this misappropriation have been quite serious: while ANI Development currently owes its investors over $120 million, just $11 million remains in ANI Development’s escrow account, the SEC notes.
Concerned about investments with
Cain, ANI Development, LLC and Relief Defendant American National Investments, Inc. Allegedly Violated SEC Rules; SEC Seeking a Preliminary Injunction
Gina Champion-Cain, ANI Development, LLC and Relief Defendant American National Investments, Inc., by allegedly engaging in the aforementioned conduct, allegedly violated the antifraud provisions of Section of the Securities Act and Sections of the Exchange Act, and the relief defendant has unjustly retained investor funds that it has no legitimate entitlement to, the SEC states.
The SEC, in order to halt defendants’ unlawful conduct and preserve the status quo, is allegedly seeking a preliminary injunction that, among other relief, appoints a permanent receiver over ANI Development, American National Investments, and all of their subsidiaries and affiliates, the SEC notes.
The SEC is also seeking permanent injunctions prohibiting defendants’ future violations of the federal securities laws, and an order requiring defendants and relief defendant to disgorge their ill-gotten gains, along with prejudgment interest, and imposing civil penalties on defendants, the SEC reports.
Finally, it is important to note that, as of the date of this article, there has not been a finding of liability as to the complaints or allegations mentioned in this article, unless otherwise indicated. Any reader should also read the original sources hyperlinked in this blog for accuracy, including any BrokerCheck report and/or record of any disciplinary or regulatory action. Those sources are incorporated by reference into the text of this blog, and are the governing materials in case of any inconsistencies or typos in this blog.
Securities Lawyer Investigating
The Rosca Scarlato LLC law firm represents investors who lose money as a result of investment-related fraud or misconduct and are currently investigating Gina Champion-Cain’s alleged sham investment fraud scheme. The firm takes most cases of this type on a contingency fee basis and advance the case costs, and only gets paid for their fees and costs out of money recovered for clients. Attorney Alan Rosca, a securities lawyer and adjunct professor of securities regulation, and has represented thousands of victimized investors across the country and around the world in cases ranging from arbitrations to class actions.
Investors who believe they lost money as a result of Gina Champion-Cain’s alleged sham investment fraud scheme may contact attorney Alan Rosca for a free no-obligation evaluation of their recovery options, at 888-998-0530, via email at arosca@rscounsel.law, or through the contact form on this webpage.