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Commission Finds Nonprofit Leaders Scammed Investors

The Arizona Corporation Commission ordered multiple individuals and their affiliated companies to pay a total of $1.24 million in restitution and $80,000 in administrative penalties for defrauding investors.

The Commission found that Robert J. Moss, Jeffrey D. McHatton and Robert D. Sproat and their nonprofit, The Fortitude Foundation, defrauded 12 investors in the sale of unregistered securities in a variety of investments, including a purported operation to recover gold the Japanese Navy hid during World War II in the Philippines. The Commission found that Moss, McHatton and Sprout represented to investors their commitment to a biblically based code of business ethics and principles of honesty, integrity and transparency without disclosing a 2008 California desist and refrain order against Moss for securities fraud. 

The Commission also found that the principal of the gold recovery operation, Vernon Twyman, Jr. and his company, Ventures 7000, LLC, provided the informational materials that The Fortitude Foundation used to solicit investors and that those materials contained misleading projections and omitted to disclose a 1998 S.E.C. judgment against Twyman and the 2008 California order against Moss for securities fraud. The Commission ordered Twyman and Ventures 7000, LLC to pay $744,474 in restitution.

Additionally, the Commission found that Kevin Krause participated in and induced two unregistered and fraudulent securities sales by The Fortitude Foundation. Krause has two prior Commission orders entered against him for committing securities fraud and registration violations, which he did not disclose to investors. The Commission ordered Krause to pay $144,000 in restitution.

All documents relating to this agenda item can be found in the Corporation Commission's online docket a https://edocket.azcc.gov and entering docket number S-20953A-16-0061.

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