SEC v. Marshall E. Melton; and Integrated Consulting & Management, LLC, No. LR-25740, Middle District of North Carolina (June 1, 2023) — Press Release

U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 25740 / June 1, 2023 Securities and Exchange Commission v. Marshall E. Melton and Integrated Consulting & Management, LLC, No. 1:23-cv-00434 (M.D.N.C. filed May 30, 2023) SEC Charges Repeat Securities Law Violator with New Offering Fraud The Securities and Exchange Commission today charged Greensboro, North Carolina resident Marshall E. Melton and a business Melton controls, Integrated Consulting & Management, LLC, with conducting an offering fraud that largely targeted older investors. Melton is a repeat securities law violator who was charged by the Commission in 1997 with securities fraud and misappropriation of investor assets. The SEC's complaint, filed in the United States District Court for the Middle District of North Carolina, Greensboro Division, alleges that, between March 2016 and at least April 2021, Melton fraudulently offered and sold to seven investors a total of approximately $1.03 to $1.49 million of interests in what Melton described as a real estate development venture in Laurinburg, North Carolina. The complaint states that six of these investors ranged in age from almost 60 to just over 86, with an average age of 75 at the time of investment. According to the complaint, Melton told each investor that he would use the funds to purchase properties in disrepair in downtown Laurinburg, renovate those properties for rental income and resale, and pay the investors a return from rental income and/or sale proceeds. The SEC alleges that, while Melton used some investor funds to purchase seven properties in Laurinburg, he did little to renovate, develop, or commercially use them, and instead misappropriated for his own use nearly two-thirds of the investors' funds. The complaint further alleges that, in April 2021, Melton transferred ownership of five of the Laurinburg properties to two complaining investors in exchange for a release of claims against him, but to facilitate this transfer, he fraudulently induced two other investors to relinquish their interests in those properties-misleadingly telling one that he would get her something better, which he never did, and misrepresenting to the other that he had a buyer for the property and could only make the sale if the investor exchanged his interests for a promissory note that Melton would then repay. The complaint states that Melton later defaulted on this promissory note. The complaint charges Melton and Integrated Consulting & Management, LLC, with violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC seeks permanent injunctive relief, disgorgement of ill-gotten gains with prejudgment interest, and civil penalties against each defendant. The SEC also seeks a conduct-based injunction against Melton, permanently enjoining him from participating in the issuance, purchase, offer, or sale of any security except for his own personal accounts. The SEC's investigation was conducted by Micheal D. Watson with the assistance of Jerome DeWitt, and was supervised by Stephen E. Donahue and Justin C. Jeffries, all of the SEC's Atlanta Regional Office. The litigation will be led by Robert Schroeder and supervised by M. Graham Loomis. The SEC acknowledges the assistance in this matter of the North Carolina Secretary of State, Securities Division.

U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 25740 / June 1, 2023 Securities and Exchange Commission v. Marshall E. Melton and Integrated Consulting & Management, LLC, No. 1:23-cv-00434 (M.D.N.C. filed May 30, 2023) SEC Charges Repeat Securities Law Violator with New Offering Fraud The Securities and Exchange Commission today charged Greensboro, North Carolina resident Marshall E. Melton and a business Melton controls, Integrated Consulting & Management, LLC, with conducting an offering fraud that largely targeted older investors. Melton is a repeat securities law violator who was charged by the Commission in 1997 with securities fraud and misappropriation of investor assets. The SEC's complaint, filed in the United States District Court for the Middle District of North Carolina, Greensboro Division, alleges that, between March 2016 and at least April 2021, Melton fraudulently offered and sold to seven investors a total of approximately $1.03 to $1.49 million of interests in what Melton described as a real estate development venture in Laurinburg, North Carolina. The complaint states that six of these investors ranged in age from almost 60 to just over 86, with an average age of 75 at the time of investment. According to the complaint, Melton told each investor that he would use the funds to purchase properties in disrepair in downtown Laurinburg, renovate those properties for rental income and resale, and pay the investors a return from rental income and/or sale proceeds. The SEC alleges that, while Melton used some investor funds to purchase seven properties in Laurinburg, he did little to renovate, develop, or commercially use them, and instead misappropriated for his own use nearly two-thirds of the investors' funds. The complaint further alleges that, in April 2021, Melton transferred ownership of five of the Laurinburg properties to two complaining investors in exchange for a release of claims against him, but to facilitate this transfer, he fraudulently induced two other investors to relinquish their interests in those properties-misleadingly telling one that he would get her something better, which he never did, and misrepresenting to the other that he had a buyer for the property and could only make the sale if the investor exchanged his interests for a promissory note that Melton would then repay. The complaint states that Melton later defaulted on this promissory note. The complaint charges Melton and Integrated Consulting & Management, LLC, with violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC seeks permanent injunctive relief, disgorgement of ill-gotten gains with prejudgment interest, and civil penalties against each defendant. The SEC also seeks a conduct-based injunction against Melton, permanently enjoining him from participating in the issuance, purchase, offer, or sale of any security except for his own personal accounts. The SEC's investigation was conducted by Micheal D. Watson with the assistance of Jerome DeWitt, and was supervised by Stephen E. Donahue and Justin C. Jeffries, all of the SEC's Atlanta Regional Office. The litigation will be led by Robert Schroeder and supervised by M. Graham Loomis. The SEC acknowledges the assistance in this matter of the North Carolina Secretary of State, Securities Division.