DAVID KUSHNER ALLEGEDLY SCAMMED NFL PLAYERS, INVESTORS OUT OF MILLIONS… READ THE COMPLETE FEDERAL FILING…
BY: 24/7 CRIME DESK | BocaNewsNow.com
BOCA RATON, FL (BocaNewsNow.com) (Copyright © 2024 MetroDesk Media, LLC) — The Securities and Exchange Commission just charged a Boca Raton resident with running a massive fraud that targeted professional athletes and investors. David Kushner, who allegedly used part of the suspected ill-gotten gains to rent a house in the Hamptons, operated under the name “La Mancha Funding Corp.” Here is the announcement the SEC shared with BocaNewsNow.com. We are publishing the complete complaint at the end of this report:
OFFICIAL STATEMENT: The Securities and Exchange Commission 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.
“As we allege, Kushner lied to investors and simply stole the money that would have given them at least some of the investment returns he had promised,” said Sheldon L. Pollock, Associate Director of the SEC’s New York Regional Office. “The Commission continues to scrutinize private investment opportunities where defendants fail to follow through on their commitments to investors.”
The SEC’s complaint, filed in the U.S. District Court for the Southern District of New York, charges Kushner and La Mancha with violating the antifraud provisions of the Securities Act of 1933, the Securities Exchange Act of 1934, and the Investment Advisers Act of 1940. The complaint seeks a permanent injunction, disgorgement plus prejudgment interest, and civil monetary penalties, as well as a conduct-based injunction and an officer-and-director bar against Kushner.
The investigation of this matter was conducted by Cynthia Matthews, James Flynn, Jessica Quinn and George N. Stepaniuk of the SEC’s New York Regional Office and was supervised by Mr. Pollock. The litigation will be led by Russell Feldman, under the supervision of Preethi Krishnamurthy. The SEC also wishes to acknowledge the assistance of Office of the District Attorney for New York County, which today filed parallel criminal charges against Kushner.
