Securities and Exchange Commission v. BNZ One Capital, LLC, et al. was filed in the United States District Court for the Central District of California on October 28, 2021 claiming Defendants violated the antifraud provisions of the Securities Act, the Securities Exchange Act, and Rule 10b-5 thereunder, as well as the registration provisions of the Securities Act. The SEC also brings claims against individual Defendants Barber and Zimmerle for violations of the broker-dealer registration provisions of the Exchange Act and accuses them of being secondarily liable for BNZ’s fraud as control persons pursuant to the Exchange Act.
Defendant BNZ One Capital, LLC (“BNZ”) is a corporation that the individual Defendants, Brett Reed Barber (“Barber”) and Louis Alfonso Zimmerle (“Zimmerle”), told investors was making investments in real estate and alternative investments. Guaranteed Income Solutions, Inc. (“GIS” or “Relief Defendant”) was another company of Barber’s to which the SEC alleges that Barber and Zimmerle transferred money.
In order to perpetuate the scheme, Barber and Zimmerle solicited investments in BNZ by representing to investors that BNZ invested in real estate and alternative investments. Through the solicitation process, they convinced 105 investors to buy BNZ investments in the form of promissory note agreements entitled Lender/Investor’s Statement Agreements (“LIAs”) by promising those investors that BNZ would repay their principal investments and generate a return of 10% a year. Almost half of the funds raised came from funds held in investors’ self-directed Individual Retirement Accounts (“IRAs”). Instead of investing these funds as promised, Barber and Zimmerle used investor funds to pay investor returns in a Ponzi-like scheme, paid themselves generous “finders fees” for bringing in investors, and transferred a significant amount of money to Barber’s company, GIS.
The SEC seeks findings that Defendants committed these violations, permanent injunctions against each Defendant’s future violations of the securities laws, permanent injunctions precluding Barber and Zimmerle from participating in an unregistered securities offering, disgorgement with prejudgment interest from Defendants and the Relief Defendant, and civil monetary penalties against Defendants.