FROM: SECURITIES AND EXCHANGE COMMISSION
Defendant in SEC Enforcement Action Sentenced and Ordered to Pay Restitution
The Securities and Exchange Commission announced today that, on December 5, 2012, the United States District Court for the District of Connecticut sentenced Stephen B. Blankenship, a resident of New Fairfield, Connecticut to forty-one months imprisonment plus three years of supervised release and ordered him to pay a fine of $7,500.00, and restitution in the amount of $607,516.81 based upon his guilty plea to one count of Mail Fraud and one count of Securities Fraud. On September 12, 2012, Blankenship pleaded guilty to all charges brought by the United States Attorney’s Office in Connecticut in connection with a scheme he operated through Deer Hill Financial Group, LLC in Danbury, Connecticut. From 2002 to 2012, Blankenship falsely represented to numerous investors that he had investment opportunities that were safe and would pay a consistent return to investors. Instead, there were no actual investments and Blankenship used some of the victim’s funds to pay personal and business expenses and other investors in furtherance of his fraud.
On September 13, 2012, the Commission filed a civil complaint in the United States District Court for the District of Connecticut alleging that Blankenship misappropriated at least $600,000 from at least 12 investors by falsely representing that he would invest their funds. The Commission’s complaint seeks the entry of a permanent injunction against future violations, disgorgement of ill-gotten gains plus pre-judgment interest and civil monetary penalties. The Commission litigation is still pending.
On October 11, 2012, the Commission barred Blankenship from the securities industry based his guilty plea. The Connecticut Department of Banking’s Securities Division has also obtained, by consent, a revocation of Blankenship’s state license and barred Blankenship and Deer Hill from operating in Connecticut.
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