Lev Parnas and David Correia

On April 15, 2021, the U.S. District Court for the Southern District of New York entered a final consent judgment against Florida resident David Correia for his role in participating in an offering fraud that raised millions of dollars from investors.

According to the SEC’s complaint, from 2013 through mid-2019, Correia, along with another individual, Lev Parnas, raised over $2 million from investors through investments in their entity, Fraud Guarantee. According to the complaint, Parnas and Correia told potential investors that their funds would be used to develop products that would help customers recoup losses resulting from investment or consumer fraud. The complaint further alleges that contrary to Parnas’s and Correia’s representations, the funds were instead largely used for personal expenses including travel, jewelry, cars, and disbursements at a casino.  As alleged, Parnas and Correia also falsely told potential investors that they had raised millions of dollars from other investors and that they had invested hundreds of thousands of dollars of their own money into Fraud Guarantee.

On February 12, 2021, the Court entered a partial final judgment against Correia by consent, permanently enjoining him from violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. On February 17, 2021, the Commission imposed an associational and penny stock bar on Correia.

The final judgment orders disgorgement of $43,650, representing Correia’s ill-gotten gains, and prejudgment interest of $10,406, and that disgorgement shall be deemed satisfied by the restitution order entered against Correia in the parallel criminal proceeding, United States v. Parnas, et al., 19 Cr. 725 (JPO). In that proceeding, Correia pleaded guilty and has been sentenced and ordered to pay restitution and forfeit assets.

The SEC’s litigation continues against Parnas.

The SEC’s investigation has been conducted by Lindsay Moilanen, Jordan Baker, John O. Enright, and Sheldon L. Pollock of the New York Regional Office, and the litigation is being led by Lee A. Greenwood and Ms. Moilanen.  The case is being supervised by Sanjay Wadhwa.

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