Sec Cryptocurrency SEC Alleges Son and Father-in-Law Touted Faith to Target Church Members in $20 Million Offering Fraud

The Securities and Exchange Commission today charged Brett M. Bartlett, his father-in-law Scott A. Miller, and their companies for fraudulent securities offerings that raised at least $20.5 million, some of which Bartlett and Miller misused for personal expenses.

According to the SEC’s complaint, from at least June 2018 to May 2020, Bartlett and Miller raised funds from more than 1,000 investors nationwide by selling promissory notes, stock, and fraudulent gold contracts through their companies, Dynasty Toys Inc., The 7M eGroup Corp., Concept Management Company LLC, and Dynasty Inc. As the complaint alleges, when soliciting investors, many of them from a large church in central Illinois, Bartlett frequently invoked his Christian faith and attributed his alleged success to divine intervention to win investor trust. The complaint further alleges that, to stave off demand for cash payouts from their unsuccessful business ventures, Bartlett and Miller misled investors, made more than $11 million in Ponzi-like payments, and sent to investors $21 million in bad checks that bounced due to insufficient funds. In addition, Bartlett and Miller misappropriated more than $1.2 million for personal use, including vacations, entertainment, and payments for a luxury rental home.

“As we allege in our complaint, Bartlett and Miller preyed on church members, and while the two proclaimed their faith, they practiced lies and deception,” said Michele Wein Layne, Director of the SEC’s Los Angeles Regional Office. “This action demonstrates our continued commitment to protecting retail investors, including victims of affinity fraud.”

The SEC’s complaint, filed in federal court in the Central District of California, charges the defendants with violating the antifraud provisions of the federal securities laws. The complaint also charges the defendants, with the exception of 7Me, with violating the registration provisions of the Securities Act. The SEC seeks permanent injunctions, including conduct-based injunctions, disgorgement with prejudgment interest, civil penalties, and officer and director bars.

In a parallel investigation, the U.S. Attorney’s Office for the Central District of Illinois announced criminal charges against Bartlett, 7Me, and Dynasty Toys. Members of the public are reminded that an indictment is merely an accusation; the defendants are presumed innocent unless proven guilty.

The SEC’s Office of Investor Education and Advocacy and the Division of Enforcement’s Retail Strategy Task Force have issued an Investor Alert with tips on how investors can avoid becoming a victim of an affinity fraud.

The SEC’s investigation was conducted by Colleen M. Keating and Maria Rodriguez and supervised by Finola H. Manvelian of the SEC’s Los Angeles Regional Office. The litigation will be led by Ruth Pinkel and supervised by Gary Leung. The SEC appreciates the assistance of the U.S. Attorney’s Office for the Central District of Illinois, the Federal Bureau of Investigation Springfield Field Office, and the Federal Deposit Insurance Corporation Office of Inspector General.