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SECURITIES AND EXCHANGE COMMISSION CHARGES ASSISTED LIVING FACILITY OPERATOR WITH FRAUD, SEEKS RESTRAINING ORDER TO PROTECT INVESTORS AND PATIENTS

The Securities and Exchange Commission has charged Dwayne Edwards, Todd Barker, Senior Solutions of Social Circle, LLC, Oxton Place of Douglas, LLC d/b/a Oxton Real Estate of Douglas, LLC,  Rome Alf, LLC, Savannah ALF, LLC, Gainesville ALF, LLC, Waterford Place ALF, LLC, Montgomery AFL, LLC, Columbus ALF, LLC, and Opelika ALF, LLC (collectively, “Defendants”), and relief defendants Oxton Senior Living, LLC, Manor House Senior Living, LLC, Susan Edwards a/k/a Susan Rogers, Sharon Nunamaker a/k/a/ Sharon Hadden and SDH Design, LLC (collectively “Relief Defendants”).  The charges are in connection with a series of fraudulent activities the SEC claims were committed by Dwayne Edwards (“Edwards”).  Edwards allegedly committed numerous fraudulent bond offerings and is allegedly still engaged in ongoing fraudulent conduct.

The Commission has requested that an emergency temporary restraining order be granted that stops Edwards and the Defendants from operating any of the Assisted Living Facilities (ALF), freezing the personal assets of Edwards and appointing a receiver to run the day-to-day operations of the ALF.  At the heart of the matter is the conduct of Edwards and Barker.  Edwards raised a total of $62 million for 8 separate assisted living facilities. The money was to be used for the purchase, renovation and operations of the facilities.  Each investor was to invest and share in the profits of a single ALF.  That investor would be paid a return of his investment from the revenue generated by that facility.  Edwards was not to receive any money from any facility unless that facility was generating a profit.  Investment funds were not to be co-mingled.

Edwards allegedly co mingled the investment funds. According to the SEC complaint, he co-mingled $3.9 million dollars raised from the various offerings.  He used this money for various purposes.  He used this money to purchase new facilities and he used this money for personal use. He allegedly took $994,000 and gave it to an entity controlled by defendant Nunamaker.

The SEC claims the emergency restraining order is needed because the fraud is ongoing.  Edwards allegedly co-mingled funds as recently as last November.  And he is still in control of the income of two of the facilities.  He has not been paying the vendors and the facilities are in poor repair.  This is putting patients at risk.  The SEC is pursuing the emergency order in order protect the investors of the properties as well as the patients.

As this complaint has recently been filed, we will not know the outcome of the case for quite some time.  You can read more about this case at https://www.sec.gov/litigation/complaints/2017/comp-pr2017-28.pdf.  This case provides a good example of the very serious nature of the fiduciary duties owed to investors.  If you have any questions about whether your actions comply with these duties, then please contact Tomlinson & Shapiro at (312) 715-8770.

This post was written by Michael Tomlinson

Michael Shapiro
(312) 715-8770
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