Goodman & Nekvasil P.A. May Recover Investor Losses – Alaska Financial Company III Promoters Charged by SEC
Securities and Exchange Commission Charges Promoters of Alaska Financial Company III
According to the SEC, Alaska Financial Company III LLC (“AFC III” or “the Fund”) is a limited liability company organized in Alaska in October 2008 with its principal place of business in Anchorage, Alaska. According to the SEC, Alaska Financial Company III is a private investment fund that has issued promissory notes to investors offering fixed annual returns of between 6% and 8.25%. The SEC reports that according to Alaska Financial Company III’s offering materials, money raised through the sale of notes was to be invested in loans secured by deeds of trust on real property. According to the SEC, Alaska Financial Company III has approximately $82 million in outstanding promissory notes ($66 million of which was raised since October 2012). According to the SEC, Alaska Financial Company III stopped soliciting new investments and shut down its website in June 2016.
The SEC Complaint alleges that Tobias Preston, his brother Charles Preston, and his son Caleb Preston (collectively, “the Prestons”), along with their affiliated investment advisory entity McKinley Mortgage Co. LLC (“MMC-FL”), raised millions of dollars from retail investors by representing that the promissory notes issued by Alaska Financial Company III provided secure, predictable annual returns of between 6% and 8.25% with “preservation of principal” because Alaska Financial Company III investments were to be primarily secured by deeds of trust on real property.
In reality, according to the SEC complaint, Alaska Financial Company III for years had been losing money. By 2012, it was insolvent and by 2014, it was unable to generate enough revenue to meet its ongoing interest obligations to investors. The Prestons, however, continued to raise money and concealed Alaska Financial Company III’s growing losses by providing investors with false documents stating that AFC III’s assets were earning between 12% and 14%, when many of Alaska Financial Company III assets were earning little or no returns. Laura Sanford, Alaska Financial Company III’s Accounting Manager, helped calculate these misleading earnings figures that the Prestons included in materials for investors. The SEC alleges that the Prestons also falsely told prospective investors that Alaska Financial Company III’s financial statements were audited when they knew the Fund had not been audited since 2010.
The SEC alleges that Tobias Preston also improperly used over $17 million of Alaska Financial Company III’s investor money for his personal benefit, including to purchase a home in Mexico, to make unsecured loans to entities he controlled, and to fund personal business ventures unrelated to Alaska Financial Company III. The SEC alleges that he also improperly used approximately $14 million of AFC III’s money to pay for MMC-FL’s operational costs, such as rent and payroll, because MMC-FL did not have sufficient income to cover its expenses. The SEC alleges that Charles Preston improperly used approximately $175,000 of Alaska Financial Company III’s money for a down payment on his personal residence and to pay off debt and personal credit card bills. The SEC further alleges that none of these uses of Alaska Financial Company III’s investor money were consistent with the offering materials they provided to investors.
Investors in Alaska Financial Company III May Recover their Losses with Goodman & Nekvasil, P.A.
If you purchased your Alaska Financial Company III investment from a licensed financial advisor, Goodman & Nekvasil, P.A. can help you. Goodman & Nekvasil, P.A., a Clearwater, Florida, law firm with a national practice representing victimized investors, has filed hundreds of cases against brokerage firms selling high-risk or fraudulent investments such as WJA Funds, and has recovered more than $180 million dollars on behalf of victimized investors.
All our cases are handled on a purely contingency fee basis by Kalju Nekvasil, Esq., formerly regional counsel with the NASD, now known as FINRA. Kalju Nekvasil, Esq. has practiced in this area of the law for more than 35 years.
There is no charge for an evaluation of your case. Further, we handle our cases on a contingency fee basis. This means that unless we recover money for you, we charge no attorney’s fee. Unless you recover any money, you pay us nothing, not even the costs and expenses which the firm will advance on your behalf. Finally, the filing of such a case should not affect your ownership of your Alaska Financial Company III investment.
If you incurred losses on your investment in Alaska Financial Company III and would like your case evaluated by a securities attorney (again, there is no charge for an evaluation and all cases are handled on a purely contingency fee basis), please contact us.
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