SEC Secures $51M Final Judgment Against Tri Energy and Co-Defendants for Their Gold-Related Ponzi Scheme

Holding:

The Securities and Exchange Commission (“SEC”) has announced that the U.S. District Court for the Central District of California entered a final judgment on April 13, 2009, against defendants Tri Energy, Inc., H & J Energy Company, Inc., Robert Jennings, Arthur Simburg, and La Vie D'Argent (collectively the "Tri Energy Defendants"). In this settled action, the district court ordered the Tri Energy Defendants to pay $35 million in disgorgement and $2,048,466 in prejudgment interest, and ordered Simburg and Jennings to each pay a civil penalty of $7 million. $28,058,310 of the disgorgement is deemed satisfied by the criminal restitution ordered in a parallel criminal proceeding. In a related criminal proceeding, Simburg entered into a plea agreement, and on November 17, 2008 got a sentence of nine years imprisonment. After jury trial, the jury returned a guilty verdict against Jennings on July 11, 2008, for which Jennings was sentenced on November 17, 2008 to twelve years imprisonment. Defendant Henry Jones was extradited from Hong Kong and convicted after a jury trial on July 11, 2008, and was sentenced to twenty years imprisonment on April 3, 2009.

Detailed Summary:

The SEC’s amended complaint, filed on August 10, 2006, stated that Tri Energy, Inc. and H & J Energy, Inc. represented themselves as companies engaged in the mining business. Defendant Jennings is the president and chairman of Tri Energy, as well as the president and treasurer of H & J Energy.  The complaint stated that defendant Simburg of is the senior vice president of Tri Energy. Simburg allegedly led nightly investor conference calls in which he solicited investors and lulled them with fraudulent statements. He received investor money from funds sent to the Tri Energy bank account. Relief defendant La Vie…

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