SEC-PR-2024-183 (11-21-24)
SEC Charges Advisory Firm La Mancha and its Owner David Kushner with Fraud – Defendants, who purported to make business loans, including to professional athletes, allegedly stole investor funds to pay for personal expenses
Excerpt:
Washington D.C., Nov. 21, 2024 — The Securities and Exchange Commission today charged David Kushner, a resident of Boca Raton, Florida, and his company La Mancha Funding Corp. with defrauding nearly two dozen investors out of approximately $2.1 million in a series of private securities offerings. Kushner is La Mancha’s president and sole owner.
As alleged in the SEC’s complaint, Kushner and La Mancha raised approximately $10.5 million from investors through a series of “LLCs” for the purpose of investing in short-term loans made to, among others, sports agents and professional athletes, including current and former NFL players. However, Kushner and La Mancha allegedly made material misrepresentations to the investors about what would be done with the investors’ funds, secretly taking hundreds of thousands of dollars in undisclosed “fees” for themselves out of the intended loan proceeds.
The complaint alleges that the defendants also misappropriated nearly $1.5 million of loan repayments that, according to the terms of the LLC operating agreements, were supposed to go back to the investors. Kushner used those and other misappropriated funds, including the undisclosed fees, to pay personal expenses, such as payments for personal credit card bills, college tuition, country club dues, a luxury vacation, a Mercedes Benz, and a rental home in the Hamptons.
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Source:
https://www.sec.gov/newsroom/press-releases/2024-183
SEC-PR-2024-183 (11-21-24)