On Thursday, United States Attorney Justin E. Herdman and FBI Special Agent in Charge Stephen D. Anthony announced that a New Mexico man had been charged in federal court for defrauding investors out of at least $4.4 million. 64-year-old Eugene Turner of Animas, New Mexico was charged with one count of wire fraud. Turner and Timothy E. McShane created several companies between 2006 and 2012. They include the following.
- McShane Construction All International LLC
- Rancho Hidalgo LLC
- Lordsburg Land Development LLC
- New Mexico Natural Beef & Pork LLC
- Hidalgo Alfalfa Company LLC
- Firewater Hydrogen Fuel LLC
- New Horizons West Inc.
- Granite Gap Development LLC
Turner and McShane solicited investments from investors by giving them promissory notes and/or founder’s shares in the companies. They were not registered with the SEC nor traded on any public exchange. The defendant and his co-conspirator collateralized investments in the companies with assets, which supposedly belonged to the companies. In reality, Turner and McShane knew they did not own these assets.
Turner and McShane used personal, social and business relationships of current investors to build relationships with other prospective investors. They also made false statements about the progress of the companies and misused funds from new investors to make small payments to other investors. Between 2008 and 2015, the scheme resulted in investors losing a combined total of roughly $4.4 million.
The investors did not receive interest payments guaranteed by the defendants or the investment gains promised by the defendants. McShane pleaded guilty to his role in the scheme. He is scheduled to be sentenced on March 6, 2017. At this point in time, Eugene Turner remains innocent until proven guilty beyond a reasonable doubt in a court of law.
Additional details regarding the charges can be found here.