Guilty Pleas Entered in $5 Million Investment Fraud Case

Guilty Pleas Entered in $5 Million Investment Fraud Case

After setting up the scheme in 2008, the Chattanooga brokers went on to use the money of hundreds of investors for fraudulent purposes.

Two Chattanooga brokers have pled guilty to a scheme that took $5 million from hundreds of investors. Douglas A. Dyer and James Hugh Brennan III started Broad Street Venture by telling friends and people in their community that they were going to invest money in buying companies that they would eventually take public or sell for higher gains. Friends and community members made big monetary investments, but their money never went into buying companies as Dyer and Brennan promised.

Starting in 2008, Dyer and Brennan solicited millions of dollars from investors to put in eight investment funds they created under varying versions of the “Scenic City F-10” name. The first problem with this is that neither Dyer nor Brennan were licensed to sell this type of securities. The second problem is that they transferred a large portion of this money to their personal accounts. They then used this money for personal expenses.

Dyer and Brennan have been in trouble before. Both have consistently faced regulatory violations spanning two decades. These violations include:

  • Brennan fined $10,000 by the Financial Industry Regulatory Authority for allegedly engaging in unsuitable trading in a customer’s account
  • Brennan disciplined by FINRA for failing to supervise stock trades by Dyer at another brokerage
  • Dyer fined $10,000 and suspended for 60 days by FINRA for alleged unauthorized trading
  • Both Dyer and Brennan ordered to “cease and desist” and give up their broker licenses after being cited by California’s Corporation Commissioner for illegally selling unregistered securities

Both Dyer and Brennan pled guilty to federal charges of wire fraud and tax evasion. They face up to 5 years in jail for each wire fraud and tax evasion charge. Additionally, Dyer pled guilty to disobeying a federal court order. He was previously ordered by two states to “cease and desist” from engaging in business dealings and investments. This means that Dyer faces an additional 6 months in jail for disobeying a court order. Both Dyer and Brennan will not be allowed to act as investment brokers in the future.

Facing criminal wire fraud charges puts your future and your professional and personal reputation on the line. You may already feel condemned by the court of public opinion. The criminal defense attorneys at Kidwell, South, Beasley, & Haley are committed to providing unrivaled legal support and mount a defense strategy that aggressively challenges any allegations made. Contact Kidwell, South, Beasley & Haley today online, or call 615-893-1331 to schedule a free consultation.