© 2016 The Texas Lawbook.
By Mark Curriden
(Dec. 28) – The Securities and Exchange Commission’s Fort Worth Regional Office announced Wednesday that a Florida businessman who operated smoothie and yogurt franchises wrongly used investor funding that was intended to create jobs through the EB-5 Immigrant Investor Program.
Jason Adam Ogden, the CEO of Juiceblendz and Yoblendz, agreed to pay $1.2 million in fines and restitution to resolve charges that he violated federal securities laws when he misused funds from investors – some of whom reportedly have ties in Texas.
The SEC, in a complaint filed in federal court in Florida, claims that Ogden formed AJN Investments LLC to conduct an investment offering in conjunction with the EB-5 program, which provides foreign investors a path to permanent residency when their investments create at least 10 jobs for American workers.
Ogden told investors that their money would go toward developing and operating Juiceblendz and Yoblendz stores in strip malls – stores that would create enough jobs for the non-citizen investors to qualify for EB-5 visas and ultimately green cards.
The SEC states that Ogden changed his business model midstream without updating the offering materials, focusing on developing kiosks in sports arenas and university campuses rather than following through with the construction of full-size stores.
In its complaint, the SEC accuses Ogden of improperly siphoning more than $1 million in investor funds for his personal use, making undisclosed cash transfers to his bank account. Ogden allegedly used investor funds to repay a personal loan and pay for meals and entertainment, the SEC states.
The original referral took place in Texas, which gave the SEC’s Fort Worth Regional Office jurisdiction.
“As alleged in our complaint, jobs and green cards fell by the wayside as Ogden abruptly changed his business plan and diverted funds for his own benefit,” said Shipchandler, who noted that U.S. Citizenship and Immigration Services assisted in the SEC’s investigation.
Officially, the SEC charged Ogden and AJN Investments with violating Section 17(a) of the Securities Act of 1933 and Section 10(b) the Securities Exchange Act of 1934 and Rule 10b-5.
AJN and Ogden agreed to settle the SEC’s charges without admitting or denying the allegations. Ogden will pay $1,008,681 in restitution to the investors, as well $41,024 in interest and a penalty of $160,000.
The federal court in Florida must approve the settlement agreement before it is final.
SEC senior counsel Kimberly A. Cain, Enforcement Attorney Jennifer R. Turner, Senior Trial Counsel Timothy L. Evans, and Senior Accountant Ty S. Martinez led the investigation and prosecution of Ogden.
Cain, who joined the SEC in 2012 as a general attorney after spending seven years as a lawyer at Fried Frank in Washington, D.C., has experience in these types of cases. She was one of the lead lawyers in the investor fraud case brought earlier this year against TexStar Oil and its founder, Nathan Halsey. In 2013, Cain was a leader on the SEC team that charged a husband and wife team, Marco and Bebe Ramirez, with stealing funds from investors that they promised would be used for the EB-5 program.
Turner, who joined the SEC in April 2015 after a decade at Jones Day, was one of the lead lawyers that successfully brought charges against Southlake Resources and its founder, Cody Winters, for orchestrating a $5.4 million oil and gas investment fraud scheme.
Evans, who joined the SEC in April 2012 after four years practicing law at Thompson & Knight, co-led the 2013 case against the Ramirez family. He also co-led the SEC’s enforcement action against Irving-based Couch Oil and Gas and its founder, Charles Couch, for securities fraud in May 2016.
Assistant Regional Director Jonathan P. Scott and Deputy Regional Director David L. Peavler supervised the inquiry.
AJN is represented by Fort Lauderdale lawyer Evan Appell of Gray Robinson. Ogden is defended by Miami lawyer Adam Schwartz of Homer Bonner Jscobs.
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