SAVANNAH, Ga. (AP) — A former member of the Georgia Board of Regents has agreed to settle civil charges by the U.S. Securities and Exchange Commission that he swindled investors in his energy development company out of $23 million.
A consent agreement signed by Alford Dean of Conyers was filed in U.S. District Court in Atlanta on Thursday, the same day the SEC filed a civil complaint that accused Dean of using bogus financial statements to persuade 100 investors to buy millions worth of promissory notes in anticipation of high returns.
The company, Allied Energy Services LLC, was actually struggling financially and is now bankrupt, the SEC said in court filings. Dean never put his investors' money into energy projects, the SEC said, and Dean funneled roughly $5.7 million of the money into his private bank account.
He used some of the cash to make payments toward a multimillion-dollar home in Utah, to buy a car and to cover credit card debt, the court complaint said. He also used some of the cash to pay interest owed to investors until the scheme collapsed in 2019 after going on for roughly two years.
“He gave investors the false impression that the investment opportunities that he offered purportedly through Allied would be lucrative,” the SEC's complaint said. “Contrary to such representations, (Alford) knowingly used investor funds to pay personal expenses.”
The consent agreement Alford signed says he will agree to civil penalties to be imposed later by a judge. It also states Alford neither admits nor denies the SEC's allegations.
The deal doesn't affect other civil or criminal cases against Alford. Some investors have lawsuits pending against him in federal court, and he was arrested last year on state charges of racketeering and theft. Katie Byrd, a spokeswoman for Georgia Attorney General Chris Carr, said Friday the state's case remains active.
Alford's attorney, Walter Jospin, declined to comment Friday when reached by email.
The SEC said Alford wooed investors with fake documents such as a balance sheet claiming his company had $162 million in total assets and generated total revenues of $40.5 million in 2018. In reality, the SEC said, Allied's tax returns showed the company had less than $1 million in assets and its 2018 receipts totaled less than $435,000.
Investors bought promissory notes from Alford at values of $25,000 to $825,000 apiece, the court complaint said, with rates of return ranging from 12% to 34%.
The SEC said Alford used money from newer investors to make interest payments to those who invested in the company previously, until he started missing interest payments in April 2019. Soon after, he failed to repay investors’ principal. Then state authorities arrested him last October.
Alford's background in in state government stretched back much further. He served five terms in the Georgia House of Representatives from 1983 to 1993 as a Democrat, but later gravitated toward Republicans. He later served on the state Board of Education and chaired the board of the Technical College System of Georgia.