(HedgeCo.Net) The Securities and Exchange Commission today charged a Seattle-area outdoor digital signage advertising company and two of its senior executives with stealing more than $2 million from retail investors.
According to the SEC’s complaint filed in U.S. District Court in Seattle, Digi Outdoor Media Inc.’s former chief executive officer, Donald MacCord Jr., and chief financial officer Shannon Doyle raised nearly $4.5 million in promissory notes by claiming they would use investor money to construct and install digital signs for commercial advertising around Washington, D.C. Instead, the complaint alleges that MacCord and Doyle secretly diverted millions of dollars of investor money for their own personal use, including MacCord’s luxury cars, $20,000 per month rent on a Southern California mansion, nanny and housekeeping services, and private school tuition for his children, while Doyle diverted several hundred thousand dollars to his other unrelated businesses.
The SEC’s complaint further alleges that MacCord and Doyle tried to hide their theft by creating fake invoices and sham loans to justify the money they took. They then encouraged investors to convert their promissory notes to common stock, provided forged leases to Digi’s independent auditor, and filed false financial statements with the SEC in an attempt to take the company public rather than pay off their outstanding debt to their investors.
“As alleged in our complaint, MacCord and Doyle went to great lengths to conceal their fraud by creating fake invoices, loans, and leases so they could use Digi as their personal piggy bank and bilk individual investors,” said Jina L. Choi, Director of the SEC’s San Francisco Regional Office.
In a separate action, the U.S. Attorney’s Office for the Northern District of California filed criminal charges against MacCord for conspiracy to commit wire fraud, submitting false writings to a government agency, obstruction of official proceedings, and destruction, alteration or falsification of records in federal investigations, and against Doyle for conspiracy to commit wire fraud and obstruction of official proceedings.
The SEC’s complaint charges MacCord, Doyle, and Digi with violations of the anti-fraud provisions of the federal securities laws and seeks disgorgement of allegedly ill-gotten monetary gains plus interest and penalties, permanent injunctions, and officer-and-director and penny stock bars.