The Securities and Exchange Commission has obtained final judgments on two co-founders of a New York-based crowdfunding portal, iFunding LLC, who were charged last year with misappropriating more than $1 million from investors.
The SEC alleges that William Skelley and Sohin Shah, the co-founders and senior executives of iFunding, raised more than $3 million from 42 investors in 17 states, with fraudulent claims about the company’s plans to use the funds to build an online real estate equity crowdfunding portal. According to the complaint, the pair diverted more than $1 million of investor funds for their personal use.
The complaint also alleges that Skelley made materially false and misleading oral statements to investors and later, he and iFunding LLC used two private placement memoranda to solicit investors.
The PPMs allegedly contained false statements about the use of funds and misrepresented the number of real estate projects that the company had financed, and the amount of funds that had been raised on its portal.
The judgment against Shah orders him to pay disgorgement plus prejudgment interest of $73,794 and a civil penalty of $75,000. Shah consented to the entry of the final judgment without admitting or denying the allegations in the complaint.
The default judgment against Skelley ordered future proceedings on disgorgement, prejudgment interest, and a civil penalty.