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Replies to post #96934 on Treaty Energy Corp. (fka TECO)
10/04/15 7:51 PM
10/04/15 9:21 PM
3. On information and belief, Gwyn, aided by Reid, used the fund as part of a larger fraudulent scheme intended to artificially inflate the stock of two public companies for which they acted as officers and directors, and in which they had substantial interest: Treaty Energy Corporation and Orpheum Properties, Inc. This scheme generated millions of dollars by selling virtually worthless stock to unwitting investors.1After depleting all or nearly all of the value of the fund in this scheme, Gwyn attempted to conceal his self-dealing and the corresponding loss of value by disclosing false investment performance, disclosing false asset values, and creating fraudulent account statements. After August 2nd, 2010, Gwyn continued to accept limited partner subscriptions to the fund from new investors who thought they were investing in a commodities futures trading fund, and he continued to accept further investment from existing investors who also thought they were investing in a commodities futures trading fund. On information and belief, the investors contributed to the fund on Gwyn’s affirmative representation of the nature of the fund as a commodity trading fund. On information and belief, Gwyn knowingly failed to disclose real fund performance and the extent of his self-dealing or self-interested investments when accepting new investments from existing and new investors.
26. Thereafter, in 2010, Gwyn began liquidating the fund’s assets and transferring them to himself, to private companies which he held direct and controlling interests or was otherwise interested, and to Treaty and Orpheum. The transfers, which were in the form of loans, stock purchases, and purchases of limited liability company membership interests, severely depleted the value of the fund and caused or increased the fund’s insolvency. By the end of 2011, with the knowledge and assistance of Turn Key, Kaplan, and Lapat, and contrary to the disclosure documents for the fund, nearly 100% of the fund’s assets had been transferred to these small, closely-held companies that were owned and controlled by Gwyn or Reid or had been used to buy stock in Orpheum and Treaty.
27. In 2010 and 2011, the fund also transferred substantial amounts of money into small private companies that acted as intermediaries for transferring money to Orpheum and Treaty, including Rare Cuts, LLC and Rampant Leon Financial Corporation. Orpheum, Treaty, Rare Cuts, LLC and Rampant Leon Financial Corporation had common management. On information and belief, most of the money transferred to these small private companies were ultimately transferred back to Treaty and Orpheum or into shares thereof.
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