Concorde Group Holdings Inc. was named in a recent SEC action brought against the company’s owner, Craig Zabala. Concorde Group Holdings is a Delaware-based company with a principal place of business in New York. The SEC complaint alleges that between February 2015 and August 2019, Zabala defrauded 17 investors by making allegedly false statements in order to raise approximately $4.3 million. He was purportedly raising money to develop Concorde Group Holdings into a merchant bank, although the SEC believes the millions he raised did not go toward its stated purpose.
According to the complaint, Zabala misrepresented to investors that he had already raised nearly $25 million, which persuaded investors that the company was financially stable. The SEC alleges that Concorde Group Holdings never raised more than $5 million and that Zabala misappropriated over $3 million of the investors’ money. The complaint further alleges that Concorde Group Holdings never “made any meaningful progress” toward developing the merchant bank. In order to complete this fraud, the SEC alleges that Zabala raised money from investors by offering senior notes and common stock.
During its investigation into Concorde Group Holdings, the SEC has allegedly uncovered deceptive emails to investors. In one email, Zabala allegedly misrepresented that Concorde Group Holdings had $8.3 million in cash when the cash balance was actually $59,001. The email also allegedly stated that the company had $15.1 million in investments when it had no investments. According to the SEC, after receiving this email, an individual invested $2.9 million in Concorde Group Holdings.
According to the SEC, Zabala paid $1.2 million of the misappropriated funds to investors in an affiliate company. The SEC describes these payments as “Ponzi like.” The SEC complaint also alleges that Zabala made $2 million in payments to himself and his girlfriend. According to the SEC, Zabala gave his girlfriend over $730,000 of the investor’s money between 2015 and 2019. Zabala also allegedly used the money to make car payments and to pay for international travel expenses.
The SEC seeks to permanently prohibit Zabala from serving as an officer or director of any company that offers securities. The SEC also seeks to order Zabala to return any ill-gotten gains, pay prejudgment interest, and pay civil money penalties.
If you or someone you know invested in Concorde Group Holdings and you are concerned about the investments, please do not hesitate to contact our law office at (877) 238-4175 or by email at firstname.lastname@example.org for a free and confidential consultation.