CROFT & FROST INVESTMENT LOSSES – SEC Alleges $64 Million Raised From More Than 230 Investors

CROFT & FROST INVESTMENT LOSSES – SEC Alleges $64 Million Raised From More Than 230 Investors – Seeking Investors Who Purchased Through Financial Advisors or Brokers

The Securities and Exchange Commission has filed a lawsuit against Paul Thomas Croft, Jonathan David Frost, and Matthew William Dira.  The SEC is alleging that the defendants fraudulently raised approximately $64 million from more than 230 investors. The alleged Ponzi-style payments were based around the sale of promissory notes.

Goodman & Nekvasil, P.A. is seeking investors who purchased these investments from their financial advisor, broker, broker-dealer, investment adviser, or other financial professional.

SEC Alleges $64 Million Investment Scheme

According to the SEC Complaint, from approximately January 2021 through September 2023, Croft and Frost offered and sold securities consisting of promissory notes and membership interests in limited liability companies.

The SEC alleges that they raised approximately $64 million from more than 230 investors, and that at least $53 million of the approximately $64 million raised was used contrary to the purposes represented to investors.

Were You Sold One of These Investments by a Financial Advisor or Broker?

The SEC Complaint identifies a number of entities through which Croft and Frost allegedly raised money, including:

• Rhino Onward International, LLC
• ROI Funds I-IV
• Scorpio Ref, LLC
• Well Fund LLC
• Taurus LLC
• Gemini Twins, LLC
• Capricorn, LLC
• Chestnut Holdings, LLC

The SEC alleges that Croft and Frost used these entities to offer and sell securities to investors.

If you invested in one of these entities because your financial advisor or broker recommended the investment, Goodman & Nekvasil, P.A. would like to hear from you.

Financial Advisors and Brokers Have Responsibilities to Their Customers

Investors frequently rely upon their financial advisors and brokers to evaluate investments before recommending them.

A financial professional may have access to information and resources that an individual investor does not have. Depending upon the circumstances, an investor may reasonably expect the professional to understand the investment being recommended, evaluate its risks, and determine whether it is appropriate for the investor.

Taurus Fund Investors

The SEC alleges that between March 2021 and November 2022, Croft and Frost raised more than $8.5 million from more than 30 investors through promissory notes issued by the Taurus Fund.

The notes allegedly offered annual returns ranging from 18% to 100%, with terms ranging from 12 to 96 months.

According to the SEC, Croft, Frost, and sales personnel acting at their direction—including Dira—represented to most investors that the money would be used to aid the development of a hydrogen power plant.

The SEC alleges that the hydrogen plant project never came to fruition and that all investor funds were lost.

An investor who purchased a Taurus Fund note through a broker or financial advisor may therefore want to examine what the financial professional knew about the investment and what due diligence was performed before the recommendation.

Rhino Onward and the ROI Funds

Between December 2022 and July 2023, the SEC alleges that Croft and Frost, through themselves and sales personnel including Dira, raised more than $8.7 million from more than 50 investors.

Investors allegedly purchased membership interests in one of four ROI Funds. The investment documents represented that the ROI Funds were created to fund a $10 million loan to Rhino Onward. Investors were allegedly told that Rhino Onward was being developed to construct a hydrogen power plant.

The SEC further alleges that nearly all of the investor funds raised through the ROI Funds were transferred to Croft & Frost, PLLC for payroll or loan payments.

Gemini Fund

The SEC alleges that between February and September 2023, Croft and Frost raised approximately $3 million from at least five Gemini Fund investors.

The SEC alleges that investors were told the money would be used either to develop a hydrogen power plant or for lending to small businesses.

According to the SEC, a significant amount of Gemini investor money was instead diverted to Croft & Frost, PLLC.

Capricorn and Chestnut Funds

The SEC alleges that Croft and Frost raised approximately $1.5 million from approximately five Capricorn Fund investors between June 2022 and September 2023.

Investors were allegedly told that Capricorn Fund proceeds would be used to invest in real estate, including residential housing. The SEC alleges that a significant amount of the money was instead diverted to Croft & Frost, PLLC.

SEC Alleges New Investors’ Money Was Used to Pay Earlier Investors

The SEC Complaint alleges that Croft and Frost regularly used new investor funds to pay previous investors’ monthly returns and return of principal.

The SEC characterizes these payments as Ponzi-style payments and alleges that they accounted for approximately $10 million in misused investor funds.

Why the Financial Advisor or Broker May Matter

Investors who purchased these securities through a financial advisor, broker, broker-dealer, or investment adviser should consider whether the financial professional played a role in recommending or selling the investment.

Depending upon the circumstances, potential claims may extend beyond the investment issuer or its principals.

For example, investors may want to determine whether their financial professional:

The particular facts surrounding each investor’s purchase are important.

Investors May Have Claims Against a Brokerage Firm or Financial Advisor

If a broker or financial advisor recommended one of these investments, an investor should preserve records showing how the investment was presented and sold.

Investors should also identify the financial advisor, registered representative, broker-dealer, investment adviser, or other financial professional who recommended or sold the investment.

In some circumstances, claims against a registered broker or brokerage firm may be subject to FINRA arbitration.

Goodman & Nekvasil, P.A. Is Seeking Investors

Goodman & Nekvasil, P.A. is seeking to speak with investors who purchased investments associated with Croft, Frost, Dira, Rhino Onward, the ROI Funds, Scorpio, Well Fund, Taurus, Gemini, Capricorn, or Chestnut Holdings.

If you believe a financial professional recommended one of these investments to you, we would like to learn more about the circumstances surrounding the recommendation and your resulting investment losses.

Goodman & Nekvasil, P.A. is investigating brokers who may have unsuitably recommended investments to their clients.

St. Petersburg, Florida law firm Goodman & Nekvasil, P.A., has a national practice representing victimized investors.  The  firm continues to investigate brokerage firms that placed elderly retirees and other conservative investors in unsuitable investments.

Goodman & Nekvasil, P.A., has filed numerous cases against brokerage firms selling high-risk investments and has recovered more than $600 million dollars on behalf of victimized investors.

We allege in these cases that these investment recommendations were unsuitable for our clients in view of their financial situation, needs and investment objectives.

There is no charge for an evaluation of your case. We handle our cases on a contingency fee basis. This means that unless we recover money for you, we charge no attorney’s fee.

If you incurred losses on your investment and would like your case evaluated by a securities attorney, please contact us.

Some of the information in this blog post was obtained from the SEC on 9/14/26. If you believe this information was reported incorrectly, please contact our firm: 1-800-500-4442.