A Houston-area businessman has been charged with running a $114 million Ponzi scheme by the U.S. Securities and Exchange Commission (“SEC”) that involved seeking investments for research into technology that would prevent drowsy driving accidents.
Frederick Alan Voight, 58, of Richmond, Texas, and his company, DayStar Funding LP, are accused of raising more than $114 million from 300 investors since 2004 by offering fraudulent notes to fund research at public companies. One of those companies — InterCore Inc. — lists Voight as a director and vice president.
The SEC suit charges that $13.8 million raised from 260 U.S. investors since October 2014 was purportedly used to fund InterCore's installation of its Driver Alertness Detection System (“DADS”) in “several million trucks and buses.” Voight allegedly promised investors returns of up to 42 percent for the DADS offering, but those returns never materialized and, according to the SEC complaint, “all $13.8 million is gone.”
The SEC said that Voight used the money to repay earlier investors or funneled them through two of his other companies, Rhine Partners LP and Topside Partners LP.
In addition, the SEC charges that approximately $22 million in other investment funds is also missing, but did not disclose in its complaint how Voight used the money he raised with the purported Ponzi scheme.
The SEC charged Voight and DayStar with securities fraud and conducting unregistered securities offerings, and announced that a settlement has been reached.
Voight and DayStar have agreed to return alleged illegal gains in an amount to be determined by a judge, according to the SEC. Voight and DayStar have also agreed to pay civil penalties and freeze assets, but have not admitted or denied wrongdoing.
In addition, Voight agreed to be barred from serving as an officer or director of a public company and from participating in the offer, sale or purchase of any security except for his own personal account.
The SEC says it plans further action in the matter against InterCore, which has operations in Florida and Montreal, Canada.
The Cogdell Law Firm is a boutique law firm focusing on large, complex business and criminal financial-related litigation, including white collar criminal defense, securities fraud, health care fraud investigation, criminal appeals and state criminal defense. When results matter most, contact Dan Cogdell at (713) 426-2244 or [email protected]
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