On December 12 the SEC charged Leon Ali Parvizian and his two companies, Arcturus Corporation and Aschere Energy LLC, with the fraudulent offer and sale of securities in the form of interests in oil and gas joint ventures.
The SEC also charged promoters Alfredo Gonzalez, AMG Energy, LLC, Robert Balunas, and R. Thomas & Co., LLC with violations of the securities offering and broker-dealer registration provisions of the federal securities laws.
The SEC’s complaint, filed in the United States District Court for the Northern District of Texas, alleges that the Parvizian, through Arcturus and Aschere, raised nearly $22 million from at least 380 investors between 2007 and December 2011.
The complaint alleges that Parvizian prepared and disseminated to prospective investors offering materials that included material misrepresentations and omissions regarding, among other things, material litigation involving Arcturus and Aschere.
According to the complaint, Parvizian, Arcturus and Aschere systematically, and without disclosure to investors, used the offering proceeds to pay the costs of defending and settling the litigation. The complaint further alleges that, among other things, Parvizian prematurely called for completion funds on at least two projects before he had finished drilling and testing the wells because he had already spent the offering proceeds for non-JV related expenses, including legal fees.
Parvizian, Arcturus, and Aschere spent only $7.9 million, or 36 percent, of the money raised to drill oil and gas wells.