October 25, 2013
By Bob Coleman
Editor, Coleman Report
Two months ago, a federal judge granted the SEC’s motion for a summary judgment ruling Mark Feathers’ Small Business Capital ran a three-year, $42 million Ponzi scheme that defrauded investors while paying the firm’s manager substantial bonuses.
The summary judgment was a major blow to Feathers’ in his attempt to gain control of his non-bank SBA niche lending operation.
The judge wrote, “Essentially, the SEC has shown that Feathers was not using fund profits to pay out returns, but rather other member investments – contrary to the representations of the Funds’ offering documents – as ‘Ponzi-like payments.’ Feathers had instructed his employees to maintain monthly payments to investors in IPF [Investors Prime Fund] and SPF [SB Capital Portfolio Fund] at a return of 7.5 percent per annum and 9-10 percent per annum, respectively, without taking into consideration the funds’ net income or actual profitability.”
“The SEC has presented abundant evidence demonstrating that Feathers acted intentionally or recklessly in carrying out the misrepresentations and misstatements presented in the preceding section.”
We received this email from Mark after we ran the story the SEC Receiver will develop the procedures to sell the Small Business Capital nationwide SBA 7(a) license – one of 14 such licenses in existence.
Here is the email from Mark Feathers to the Coleman Report:
“The court appointed receiver, Thomas Seaman, in the lawsuit SEC v. Small Business Capital Corp., et al, was appointed in fraud as to his licensing. SEC and SEC’s senior trial counsel, John Bulgozdy, Esq., describes Thomas Seaman, in fraud, as a “licensed CPA” (see attached Court Docket 6, and Court Docket 275). Seaman is not a licensed CPA at all, and never has been. Further, Seaman and his counsel, Allen Matkins law firm, engaged in the fraud of deceit, which is a very serious matter, and which is punishable under California civil codes, in allowing Seaman to fraudulently be described by SEC in consecutive securities lawsuits as a “licensed CPA”, the other lawsuit being “SEC v. Medical Capital Holdings”.
“In the Medical Capital Holdings lawsuit, SEC, more than coincidentally was represented by John Bulgozdy, Esq., and Seaman had counsel of Allen Matkins law, as he does now in this lawsuit. Additionally, and more than coincidentally, in both lawsuits, SEC was also represented by Roger Boudreau, CPA. Boudreau is the CPA responsible for overstating the fund member distributions of the defendants by an incredulous 54% (see attached Court Docket 187), which SEC then used as a fraudulent basis to say that the funds needed “new member capital”, and to call them a “Ponzi-like scheme” in their complaint to this lawsuit, and to have their assets seized under a seal, and in violation of the Bill of Rights to the Constitution, which prohibits unlawful seizures such as this.
“This lawsuit was rigged from the beginning by the concerted and coordinated actions of senior SEC employees, working with a receiver appointed under fraudulent pretense as to his licensing. SEC has admitted to falsely labeling Seaman’s credentials, explain this matter to be a “typo”. The combination of SEC’s 54% overstatement of fund member distributions, and having appointed a receiver who performs almost no work at present other than SEC referrals goes, and with false licensing credentials attributed along with his appointment by the Court, goes well past credibility for an Agency such as SEC.
“In the matter of these deliberate overstatements by SEC of fund member distributions, and in Seaman’s false licensing credentials, I was the person who presented this information to the Court, not SEC or the receiver. I did this from the efforts of my own legal research into these matters, and without any outside legal assistance, because my personal assets were frozen by the sealed court order. The members of the defendant investment funds, and SB Capital and myself, have suffered terribly from the bad faith actions of this agency. I will contest any authority that Seaman has to sell the license, right up to the Supreme Court, if necessary.”