SEC v. Chatfield PCS Ltd.; GO ECO Manufacturing, Inc.; and Tra Jay Scarlett, No. 1:21-cv-00641-DDD, District of Colorado (Mar. 19, 2021) — Complaint

IN THE UNITED STATES  DISTRICT COURT
FOR THE DISTRICT OF COLORADO

C ivil   A c tion  N o.

UNITED STATES SECURITIES AND
EXCHANGE COMMISION,
P la intif f ,
v.
CHATFIELD PCS LTD., GO ECO
MANUFACTURING, INC., and TRA JAY
SCARLETT,
Defendants.

FILED UNDER SEAL
COMPLAINT AND JURY DEMAND

P la intif f ,   U nite d  Sta tes Securities  and  Exchange  Commission   (“SEC”),  alleges  as  follows
against  Defendants  Chatfield   P CS  Ltd.  (“Chatfield”),   GO  ECO  Manufacturing,   Inc.  (“GO
ECO”), and Tra Jay Scarlett (“Scarlett”) (collectively,  “Defendants”).
INTRODUCTION
1. The SEC brings   this  emergency enforcement action to stop an ongoing offering
fraud and  misappropriation   of investor  assets by Defendants. Starting in  approximately  March
2016,  and continuing  through at least January 2021  (the “Relevant  Period”),  Scarlett,  through  his
company, Cha tf ie ld,  raised at least $3.2  millio n  from  investors  in  two  securities  offerings  by  GO
ECO,  a  purported environmentally friendly  drink  bottling  and  manufacturing  company
controlled  by Scarlett. Instead of dir e c ting  investor  money  to GO ECO, which never operated
and,  in  fact, never had a bank account, Scarlett  and Chatfield misappropriated the investor  funds.
Scarlett  transferred hundreds  of thousands  of dollars  of investors’  money  to  his  personal  bank

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accounts, made large cash withdrawals,  and spent investor  funds on,  among  other  things,
je w e lr y,  precious  metals,  and a down payment and mortgage  payments on Scarlett’s $1.25
million   dollar  home.
2. During the Relevant Period,  virtually   everything   Defendants told GO ECO
investors and prospective  investors  was materially  false and mis le a ding.   Defendants lie d  to
investors  about  how they planned  to use investor  funds, GO  ECO’s business  operations, GO
ECO’s relationship  with  its supposed  key client,  and GO ECO’s management team.
3. Defendants’ deceptive conduct continued  even after the SEC staff contacted them
in     December 2020.  In  early  January  2021,  Defendants  continued   to  solicit   and  obtain   investor
funds,  making s imila r  false and misleading  representations to investors  and prospective  investors
that they had been making  since 2016.
4. By  engaging  in  this  conduct,  Defendants  viola te d  Sections  17(a)(1) and (3) of the
Securities  Act  of  1933  (“Securities  Act”), 15 U.S.C. § 77q(a), Section  10(b) of the Securities
Exchange  Act  of  1934  (“Exchange  Act”), 15 U.S.C. § 78j(b), and Exchange  Act  Rule  10b-5
thereunder,  17 C.F.R. § 240.10b-5.  Defendants Scarlett and Chatfield also  violated   Section
17(a)(2) of the Securities  Act. Unless restrained and enjoined,  Defendants will  continue  to
violate  the federal securities laws.
DEFENDANTS
5. Tra  Jay  Scarle tt,  age 51, is a resident of Colorado  Springs,  Colorado.  Scarlett is
the founder,  president,  and sole owner of Chatfield  and founder,  chief executive  officer (“CEO”),
president,  and  a  substantial   shareholder  of  GO  ECO.
6. Chatfie ld PCS Ltd. is a Colorado limite d   lia bility   company, w ith  its   pr inc ipa l
place  of  business  in  Colorado  Springs,   Colorado.  Chatfield  is  controlled   by  Scarlett  and  purports

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to provide  financing   to  a  portfolio   of  companies  in  the  manufacturing,   health,  media,  and  real
estate sectors. Chatfield  is  currently  listed  as  noncompliant   with  the  Colorado  Secretary  of  State.
7.  GO ECO M anufacturing,  Inc. is   a   Colorado  corporation   with  its  principal   place
of  business  in  Colorado   Springs,   Colorado.  GO  ECO  is controlled  by Scarlett and purports  to  be
in the business  of providing  environmentally responsible   product  packaging  and  bottling   services
to commercial  customers. GO  ECO  is  currently  listed  as  delinquent   with  the  Colorado   Secretary
of State.
JURISDICTION AND VENUE

8. The  SEC  brings   this  action  pursuant  to  authority   conferred  on  it  by  Section  20(b)
of the Securities  Act [15 U.S.C. § 77t(b)] and Sections 21(d) and 21(e) of the Exchange Act [15
U.S.C. §§ 78u(d)  and 78u(e)] to restrain and enjoin  the Defendants from engaging  in the acts,
practices, and courses of business  described in this  Complaint  and acts, practices, and courses of
business  of similar  purport  and object. The SEC seeks permanent injunctions ,  disgorgement  of
ill-gotten   gains  derived  from  the conduct alleged  in  the Complaint  plus prejudgment  interest
thereon, and civil  penalties  pursuant  to Section  20(d) of the Securities  Act [15 U.S.C. § 77t(d)]
and Section  21(d)(3)  of the Exchange  Act [15  U.S.C. §§ 78u(d)(3)].
9. This   Court has jurisdiction over  this  action  pursuant  to  Sections  20(b),  20(d)(1),
and 22(a) of the Securities  Act [15  U.S.C. §§ 77t(b),  77t(d)(1),  and 77v(a)],   and Sections
21(d)(1),  21(d)(3)(A), 21(e), and 27(a) of the Exchange Act [15  U.S.C. §§ 78u(d)(1),
78u(d)(3)(A),  78u(e),  and 78aa(a)].
10. Venue is proper in the District  of Colorado pursuant to Section  22(a) of the
Securities  Act  [15  U.S.C. § 77v(a)] and Section  27(a) of the Exchange Act [15 U.S.C. § 78aa(a)]
because many  of  the  acts and transactions constituting  violations  of the Securities  Act and

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Exchange  Act  occurred  in  this  district,  including misappropriation   of  investor  funds  through
transactions  at  banks  located  in  this  district.  In addition, Scarlett r e s ides  in  this   dis tr ic t,  GO ECO
and Chatfield have their principal  places  of  business  in  this  district,  and one or more investors  in
GO ECO r e s ide   in  this   dis tr ict.
FACTS
I. BACKGROUND
A. De fe ndants  Rais e d M oney From Inve s tors  Through the  O ffe r  and  Sale  of GO
ECO Se curitie s.
11. Scarlett  formed  Chatfield  in  November  2015 and GO ECO in March 2016.
Scarlett  formed GO ECO purportedly  to provide  packaging  and bottling  services to commercial
customers. Scarlett  operated Chatfield  to solicit  investors  to invest  in GO ECO.
12.  Beginning  in approximately  March 2016, Scarlett and Chatfield  engaged  several
individua ls to,  at Scarlett’s  direction,  solicit  investments  in  GO ECO by cold-c a lling   prospective
investors.  Once a prospective  investor  expressed interest in  GO ECO,  C ha tf ie ld’ s   s ta f f  typic a lly
emailed  offering  documents  to them and often connected them with  Scarlett so that he could
s olic it  the investor over the telephone  to  make an investment  in  GO ECO.
13. Among  other things,  Scarlett,  or Chatfield’s  staff acting at Scarlett’s direction,
told investors  that GO  ECO made  and/or  bottled a sports drink for a protein  drink  company
(hereinafter  “P rotein  Drink  Company”)  and that the investment  in  GO ECO was expected to
generate 20% to 25% annual  returns  when GO ECO would  be sold  to a larger company  in  the
beverage industry.
14. Protein  Drink  Company is   a  pr iva te ly  held  corporation   with  its  principal   place  of
business  in Clearwater, Florida. Protein  Drink  Company made protein-infused   drinks.

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15. Each investor  and prospective  investor  in  GO ECO was offered and sold  GO ECO
preferred stock. The Defendants conducted two offerings  of GO ECO preferred stock. The first
offering  of  GO  ECO  Series  A  preferred  stock  began  in  approximately  March 2016 and lasted
until  about  May  2019. The second offering  of GO ECO Series B preferred stock began in
approximately May  2019  and  is  ongoing.
16. Scarlett,  and  Chatfield  staff acting at Scarlett’s direction,  distributed  GO ECO
offering  documents  to  investors  and  prospective  investors  by  email.  The GO ECO offering
materials included,   among  other  things,  tr a ns mitta l   e ma ils   w ith  links   and  information   about  GO
ECO and P rotein  Drink  Company, private placement memoranda  (“PPM”), subscription
agreements (“Subscription  Agreement”),  executive summaries  concerning  GO ECO (“Executive
Summary”),  and  investment  instructions   (“Investment  Instructions”)  (collectively,  the “Offering
Documents”).
17. Scarlett and Chatfield  distributed  a GO ECO P P M to investors  and prospective
investors for each of  the two securities offerings:  a Series A PP M dated March 29, 2016  (“Series
A PPM”), and a Series B P P M,  dated  May  3,  3019 (“Series  B PPM”). The PPMs are nearly
identical,  except with respect to language  that is not material  for purposes of the allegations  in
this  Complaint. These immaterial  differences relate to the different  series of shares, s light
wording changes in the introduction,  and  the  s pe c if ic   dolla r   amounts ide ntif ie d  in  the  “Use of
Proceeds” section.  Versions  of a Subscription   Agreement,  again s ubs ta ntia lly   s imila r  and
identical  in  all  material respects as they relate to the allegations  in this   C ompla int,  were a ls o
distributed by  Scarlett  and  Chatfield  for each of the two offerings.

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18. Scarlett and Chatfield  also distributed  a GO ECO Executive  Summary  for the
Series A offering  (“Series A Executive Summary”)  and the Series B offering  (“Series  B
Executive  Summary”).
19. Scarlett and Chatfield  distributed  at least three forms of the Investment
Instructions,  all  of which  were identical,  except for identifying  Chatfield’s  bank account and
routing  information for accounts at three different  banks  Chatfield  used  over  the  Relevant  P eriod.
Scarlett s ole ly  controlled each of Chatfield’s  bank accounts.
20. The statements in  the PPMs and Subscription  Agreements were made  by GO
ECO and Scarlett. Those  documents  were explicitly   attributed  to  GO ECO on the  face of the
document.  As the president  and CEO of GO ECO, Scarlett had ultima te  authority for the content
of the P P Ms and the distribut ion  of those written materials  to investors  and  prospective  investors.
The P P Ms prominently   disclose:  “THE  MANAGEMENT  OF THE COMPANY [GO  ECO]
HAS PROVIDED ALL OF THE INFORMATION STATED HEREIN.” The  signature  line  in
the Subscription  Agreements stated, “Accepted:  GO ECO Manufacturing,  Inc. By: . . . TJ
Scarlett CEO.”
21. The statements in  the Executive Summaries  and Investment  Instructions   were
made by C ha tf ie ld  and Scarlett. On the face of the documents,  they  were explicitly   attributed  to
Chatfield.  As the president  and sole owner of Chatfield,  Scarlett is the person w ith  ultima te
authority for the content of the Executive  Summaries  and  Investment  Instructions  and the
distribution  of those written materials  to investors.
22. At times,  Scarlett distributed  Offering  Documents to investors  and prospective
investors  hims e lf .   For  example,  on May 17,  2019, Scarlett sent an email to  an investor  attaching
the Series B PPM, Series B Subscription  Agreement,  and  Investment  Instructions.

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23. During  the Relevant P eriod,  the Defendants raised over $3.2  million  from at least
26 investors  in  Colorado   and  other  states  through  the  GO  ECO  Series  A  and  B preferred stock
offerings.  Scarlett  and  Chatfield  raised  funds  from  investors  in GO ECO stock at least as recently
as  January  2021.
24. Scarlett, as the principal  of Chatfield  and GO ECO, had the power to act and did
act on behalf of Chatfield  and GO ECO and, thus, his actions alleged herein as well as his state
of mind, are imputed  to Chatfield  and GO ECO.
B. Scarle tt and Chatfie ld M is appropriate d Inve s tor M oney.
25. The  Investment  Instructions   directed  investors  to  purchase GO ECO preferred
stock by sending  a check or making  a wire transfer to Chatfield’s  bank accounts. The GO ECO
investors’  money was received by and pooled  in Chatfield’s  bank  accounts.
26. Scarlett and GO ECO represented to investors  that investor  money sent to
Chatfield  in exchange for GO ECO stock would  be  delivered   to  GO  ECO  and  used  to  fund  and
expand GO ECO’s business.
27. None of the GO ECO investors’  money has ever been transferred from  Chatfield
to GO ECO. GO  ECO has never opened any  bank  accounts.
28. Instead of using  investor  money as represented, Scarlett, using   his  sole  control
over  Chatfield’s   bank  accounts,  misappropriated  at least  $2 millio n  of investor  funds  through  a
variety  of  means,  including   transfers  of  funds  from  Chatfield’s   bank  accounts  to  his  personal
accounts and withdrawals  of large amounts of cash. Scarlett’s misappropriat ion  began in
approximately  March 2016,  when Chatfield  first received GO ECO investor funds,  and  has
continued  through  at least January  2021.
29. For  example,  on  the  same  day  that  Scarlett  withdrew  $325,000 of investor  funds
from  Chatfield’s  account,  he  opened  a  new  account  in  his  own  name  and  funded  it  with  $318,000

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of the money  withdrawn  from the Chatfield  account. Scarlett used $273,828 of those funds  to
make a down payment in  connection  with  the purchase of his $1.25 millio n   home .  Following   the
purchase  of  his  home  with  investor  funds,  Scarlett  made additional transfers from  a Chatfield
bank account holding investor  funds  to  make  mortgage  payments  on  his  home.
30. Scarlett withdrew over $90,000  of cash in  ATM  transactions  and  over $860,000 in
w ithdr a w a ls  from Chatfield  accounts holding investor  funds.
31. In addition, Scarlett used  funds  in  the  Chatfield   accounts  holding   investor  funds  to
make payments for  his  personal  expenses,  inc ludin g  lease payments  on his  personal  residence
prior  to  purchasing   it  with  investor  funds,  purchases of precious  metals,  and  purchases of
je w e lr y.
32. Scarlett used funds  in the Chatfield  accounts holding  investor  funds for other
personal  expenses, such as travel and fine dining.  Scarlett  and  Chatfield  also  used  funds  from
GO ECO investors  for the construction  of a failed bar and to make payments to Scarlett’s  f a mily
members.
33. Additionally,  Scarlett and Chatfield used GO ECO investor  money  to make
approximately $560,000  of  payments  to Chatfield  staff.
II. SCARLETT, CHATFIELD, AND GO ECO MADE MATERIAL
MISREPRESENTATIONS AND OMISSIONS IN CONNECTION WITH THE
SECURITIES OFFERINGS.
34. In the Offering Documents distributed  to investors  and prospective  investors,
Defendants made numerous  materially  false and misleading  statements and omissions regarding,
among other things,  the use of investor  funds, GO  ECO’s business  operations, GO ECO’s
relationship   with  its  purported key customer  Protein  Drink  Company,  and  GO ECO’s
management  team.

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A. Scarle tt and GO ECO M ade  Fals e  and M is le ading State me nts  About the  Use
of Inve s tor Funds.
35. Throughout   the  Relevant  P eriod,  in  the  P P Ms and Subscription  Agreements  sent
to investors  and  prospective  investors,  Scarlett and GO ECO made false and misleading
statements and omitted  material  information  regarding how investor  funds would  be used.
36.  The Subscription  Agreements for the Series A and B offerings  stated that all  GO
ECO investor  funds would  be placed in an escrow account until  a minimum  offering  proceeds
amount  of  $1,000,000   was  raised  from  investors,  at which point  “all  proceeds from sale of
Shares w ill  be   de live r e d  dir e c tly  to the Company [GO  ECO] and be available  for its use.”
(Emphasis  added). Simila r ly ,   the    Series A and B PPMs state that “[a]ll  proceeds from the sale of
Shares up to $1,000,000 will  be deposited  in  an escrow account. Upon the sale of $1,000,000  of
Shares, all  proceeds  will  be delivered  directly  to the Company’s  [GO ECO’s] corporate account
and be available  for use by the Company  at its discretion.”  (Emphasis  added).
37. The Series A and B PPMs represented that GO ECO was selling  shares to raise
capital  that would  be used by GO  ECO  to  fund  and  expand  its  business:
a. The Series A PPM stated that “The  Company [GO ECO] is   r a is ing  e quity  c a pita l
to develop  and complete  the construction  of a modern  green manufacturing
f a c ility  . . . .”
b. The Series B PPM stated that “The  Company  [GO ECO] is   r a is ing  e quity   c a pita l
to  make  placements  into  expanding   our  worldwide   Manufacturing   reach . . . .”
c. The Series A and B PPMs stated that “Proceeds from  the sale of  Shares will  be
used to:  purchase real estate, purchase packing  and bottling  equipment,  purchase
confectionary  equipment,  construction  costs, manufacturing  expenses, staffing,
and working  capital.”
38. Scarlett,  or  Chatfield’s  staff  acting  at Scarlett’s  direction,  distributed  these
statements to investors  and prospective  investors  during  the Relevant P eriod by email.

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39. Based on  the representations set forth  in paragraphs 36 and 37 above, a reasonable
investor  would  have  understood  that  the money  they invested  in GO ECO stock would  be placed
into  an  escrow  account  and/or  transferred  directly   to  GO  ECO  to  fund  and  expand  its  business.
40. Scarlett and GO ECO further  represented  in  the  Series A PPM that the “Offering
is being  sold  by the Managing  Members of the Company  [GO ECO]. No compensatory  sales
fees or related commissions  will  be paid to such Managing  Members. Registered broker [sic] or
dealers who are members of the FINRA [sic] and who enter into  a Participating  Dealer
Agreement with  the Company  [GO  ECO]  may  sell  shares.  Such  brokers  or  dealers  may  receive
commissions  up to ten percent (10%) of the price of the Shares sold.”  The Series B PPM reads
identically  to the Series A PPM except that the  percent in  parentheses is incorrectly  stated  as 5%.
41. In addition,  the Series A and B P P Ms both state that Scarlett takes no current
salary and that there is “no accrued compensation that is due any member of Management.”
42. Based on  the representations  set forth  in  paragraphs 40 and 41,  a reasonable
investor  would  have understood  that no fees or commissions,  or other immediate  compensation,
would  be  deducted  from  their  investment   in  GO  ECO  to  make  payments  to  Scarlett,  C ha tf ie ld  or
Chatfield  staff, because Scarlett is listed  as the CEO of GO ECO in the PPMs, and none of the
Defendants is a registered broker or dealer.
43. The statements regarding  the use of investor  monies are false and misleading.
None of the GO ECO investors’  money was placed  into  an escrow account, nor was any of it
transferred to GO ECO, as GO ECO never opened a bank  account. Instead,  investor  funds  were
misappropriated  by Scarlett and Chatfield,  contrary to the representations  that the money  would
be provided  directly  to GO ECO and that Scarlett, as a member of GO ECO management,  would

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not receive compensation  for selling  the shares, and that only  registered  broker  dealers  may  be
compensated for selling  shares.
44. Each of these statements regarding  use of investor  monies  was false and
misleading  when made,  and  Scarlett  and  GO  ECO  knew  or  were  reckless  in  not  knowing,   and
should  have known,  that these statements were false and misleading  because Scarlett intended  to
and   immediately   began   misappropriating   investor   monies.
45. Scarlett and GO ECO omitted  to state material  facts that  were necessary to render
their  disclosures  regarding  the uses of investor  funds  not  misleading.  These omissions  include
the  actual  use  of  investor  funds  as  described  above.
46. In addition,  Chatfield knew  that the P P Ms and Subscription Agreements
contained  false and misleading  information  concerning  the uses of GO ECO investor  funds at the
time  it  distributed   them  to  potential   investors.
47. The above misrepresentations  and omissions  as to the use of investor  proceeds
were material  to investors  and  potential   investors  because  the  misappropriation   and  diversion  by
Scarlett and Chatfield of a ll  or   s ubs ta ntia lly  all  investor  money  that  was  invested  in  GO  ECO
would  be material  to any reasonable investor.
B. Scarle tt and GO ECO Made  Fals e  and Mis le ading State me nts  About GO
ECO’s  B us iness Ope rations  and Financial  Pe rformance.
48. Scarlett and GO ECO made materially  false and misleading  statements to
investors and prospective  investors about  GO  ECO’s  business  operations  and  financial
performance.
49. In the GO  ECO PPMs distributed  to investors  and  prospective  investors
throughout  the Relevant P eriod, Scarlett and GO ECO represented that  GO ECO was an
operating  bottling  and packaging  company with  an existing  customer base. For example:

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a. The Series A PPM states:  “GO  ECO Manufacturing,  Inc. . . . provides  packaging
and bottling  services for commercial  customers.”  (Emphasis  added.)
b. The Series B PPM states: “GO  ECO Manufacturing,  Inc. . . . s pe c ia lize s   in
providing  services for high  quality  bottling  production as well  as innovative
product  packaging.”  (Emphasis  added.)
c. The Series A and B PPMs state: “The  Company  also  maintains   a  solid   core  of
business  in propriety  products marketed and created for both  wholesale  and retail
sale.” (Emphasis  added.)
d. The Series A and B PPMs state: “The  Company  seeks  to  maintain   and  expand  a
presence in  a variety  of  markets including   but  not  limited   to;  traditional   bottling,
shot type bottle  packaging,  case design  and packaging,  and new product
development.”  (Emphasis  added.)
e. The Series B PPM states: “The  Company  is  raising  equity   capital  to  make
placements  into  expanding  our  worldwide  Manufacturing  reach that  consistently
develops  new ways of streamlining  the packaging  process, as well as vertically
integrate  and  consistently  expand on current market share with  existing   and
freshly developed  beverages that are penetrating  the market.” (Emphasis  added.)
50. Additionally,  the  Series  B  P P M included  a financial  statement  that showed
revenues of $17,099,816  and net ordinary income  of $10,073,334  from manufacturing  and
packaging  in  2017.
51. Scarlett,  or  Chatfield’s  staff acting  at Scarlett’s  direction,  distributed  these
statements to investors  and prospective  investors  during  the Relevant P eriod by email.
52. Based on  these statements,  a  reasonable  investor  would  have understood that GO
ECO  is  a  bottling   and  packaging  company with  existing   operations  and  customers  and millions
of dollars  of annual  revenues and profits.
53. The statements regarding  GO  ECO’s  business  operations  and  financia l
performance are false and misleading.  GO ECO has never had an active manufacturing  or
bottling business  or operations.  GO ECO has never had any manufacturing  or bottling  facilities,
equipment,   customers,  revenues,  or  profits.  Nor has it ever had any bank  accounts  or   f ile d  any
tax returns.

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54. The statements  regarding  GO  ECO’s  business  operations  and  financial
performance were false  and  misleading   when  made,  and Scarlett and GO ECO knew or were
reckless in not knowing,  and should  have known,  that these statements were false and
mis le a ding.  As the president  and CEO of GO ECO, Scarlett knew that GO ECO did  not have
existing  operations,  customers,  or millions  of dollars  of annual  revenues and profits.
55. Scarlett and GO ECO omitted  to state material  facts that  were necessary to render
their disclosures  and representations  regarding  GO ECO’s business operations  and financial
performance not misleading.  These omissions  include  that GO  ECO had  no active business
operations.
56. In addition,  Chatfield,  through  Scarlett,  knew that the PPMs contained false and
misleading  information  about GO ECO’s business  operations  and financial  performance at the
time  it  distributed   them  to  potential   investors.
57. The  above  misrepresentations  concerning  GO  ECO’s  business  operations  and
financial  performance  were  material  to  investors  and  prospective  investors  because  a reasonable
investor  would consider  whether a company  has an existing  business,  as well as the revenue  and
profits  generated from that business,  when assessing the risks and potential  returns of making  an
investment  in the company.
C. De fe ndants  M ade  Fals e  and M is le ading State me nts Regarding GO ECO’s
B us ine ss Relations hip with its Purporte d  Ke y Clie nt, Prote in Drink
Company.
58. Defendants made numerous  materially  false and misleading  statements to
investors  and  prospective  investors  regarding  the  business relationship   between GO  ECO and  its
purported  key client,  P rotein  Drink  Company.
59. Throughout  the Relevant Period, Defendants heavily  touted  the purported
relationship   between GO  ECO and P rotein  Drink  Company when they solicited  investors.

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Investors  were told or a lly  by Scarlett or C ha tf ie ld  staff that GO ECO either made the P rotein
Drink  Company sports drinks  itself or had an exclusive  contract with P rotein  Drink  Company to
make or bottle its  drinks.  Defendants a ls o  often emailed  detailed  presentations  purporting   to
describe P rotein  Drink  Company’s highly  successful products  and  business  to  prospective
investors along  with  the  GO  ECO  Offering Documents  that represented that GO ECO provides
bottling  services to customers.
60. Scarlett and GO ECO made statements in  the Series A and B PPMs, and  Scarlett
and Chatfield  made statements in  the Executive Summaries,  regarding  the supposed business
relationship   between GO  ECO and P rotein  Drink  Company:
a. The Series A PPM states: “GO ECO Manufacturing has entered into  a strategic
partnership  with  [P rotein  Drink  Company],  one of the fastest growing  healthy
shot type beverage companies  in  the nation.  At present they will  be GO ECO
Manufacturing’s   number  one  client  and  will   expand  to  produce  multiple   products
through  their  assembly  lines.”  (Emphasis  added.)
b. The Series A Executive Summary  states:  “At the end of 2015, Go-Eco
Manufacturing  negotiated  an exclusive  production  contract with [P rotein  Drink
Company],  a Florida  based beverage company.  Right  now, [P rotein  Drink
Company]  is  the  number  one  protein  shot  beverage  in  the  world,   selling   its
products  in  over  80  thousand  big  box  stores  nationwide,  including  Wal-Mart,
Target,  7-Eleven,  etc.”  (Emphasis  added.)
c. The Series B Executive  Summary  states: “At the end of 2015, Go-Eco
Manufacturing  negotiated  an exclusive  production  contract with [P rotein  Drink
Company],  a Florida  based beverage company. [Protein  Drink  Company]  has the
best tasting  P rotein water on the market, selling   its  products  in  over  100  thousand
big  box stores nation-w ide,  including  CVS, Wegmans,  Safeway, Target, 7-
Eleven,  etc.” (Emphasis  added.)
d. In the Series A and  B  PPMs, P rotein  Drink  Company’s  product  was lis te d  a s   a
GO ECO “Key  Account[].” (Emphasis  added.)
61. Chatfield  and Scarlett distributed  these statements to investors and  prospective
investors during  the Relevant P eriod by  e ma il.

15

62. P rotein  Drink  Company stopped  production   of  all  drinks  in  April  2019,  and exited
the beverage industry  entirely  in  the first quarter of 2020. After April  2019,  Scarlett and
Chatfield  have continued  to tout the purported business relationship  between GO ECO and
P rotein  Drink  Company in     the Series B Executive Summary and in  e ma ils  and oral
representations  to investors  and prospective  investors.
63. On September 1, 2020,  Chatfield  sent an email  to a prospective  investor  that
stated in part:
a. “Go-Eco  Manufacturing  has positioned  itself  to take full  advantage of a niche
opportunity  within  the bottling  industry.   This enabled  Go-Eco  Manufacturing  to
negotiate  an exclusive  production  contract with [P rotein  Drink  Company],  a
Florida  based beverage company.  . . . Right  now,  [P rotein  Drink  Company]  is   the
number  one  protein  shot  beverage  company  in  the  world  selling   its  products  in
over  60  thousand  big  box  stores  nation  wide,  i.e. Wal-Mart,  Target, 7-Eleven,
etc.” (Emphasis  added.)

64. That investor invested $10,000 in GO ECO on September  17,  2020,  and another
$10,000 on January 7,  2021.
65. A reasonable investor  would  have understood  from the statements in  paragraphs
60 and 63 that GO  ECO  had  a  strategic  partnership  and  exclusive   production   contract  with  a  key
c lie nt,  P rotein  Drink  Company,  for  whom  GO  ECO  provided   manufacturing   and/or  packaging
services.
66. The statements regarding GO ECO’s business relationship   with   P rotein  Drink
Company are false and  misleading. GO ECO never entered into  a strategic partnership  with
Protein  Drink  Company,  nor did  it ever have an exclusive  production  contract with P rotein  Drink
Company.  GO ECO has never performed any services for P rotein  Drink  Company,  made  any
products  for  P rotein  Drink  Company,  invoiced  P rotein  Drink  Company,  or been paid  by  P rotein
Drink  Company for anything.

16

67. The statements regarding GO ECO’s business relationship   with   P rotein  Drink
Company were false and misleading  when made, and Scarlett, Chatfield,  and GO ECO knew or
were  reckless  in  not  knowing,   and  should  have  known,  that these statements were false and
mis le a ding.  As the president  and CEO of GO ECO, Scarlett knew that GO ECO did  not have a
strategic partnership  or exclusive  production  contract with P rotein  Drink  Company and did  not
provide  manufacturing  or  packaging  services for P rotein  Drink  Company.
68. Further,  the  Defendants omitted  to  state material  facts that were necessary to
render their disclosures  and representations  regarding  the relationship  between GO ECO and
P rotein  Drink  Company not  misleading.  These omissions  include  that  GO  ECO  did  not have an
exclusive  production  contract with P rotein  Drink  Company or provide  services for P rotein  Drink
Company.
69. Scarlett and Chatfield  knew at the time  they distributed  the statements regarding
GO ECO’s business  relationship  with  P rotein  Drink  Company that the statements were false and
mis le a ding.
70. The above misrepresentations  and omissions  with respect to the relationship
between GO ECO and P rotein  Drink  Company were  material  to  investors  and  potential  investors
because, among  other things, a strategic partnership  and exclusive  production  contract w ith  a
leading  beverage company  would  be important  to a reasonable investor’s  decision   to  invest  in
GO ECO.
D. De fe ndants  M ade  Fals e  and M is le ading State me nts Regarding GO ECO’s
M anage me nt Te am.
71. Scarlett and GO ECO made statements in  the Series A and B PPMs, and Scarlett
and Chatfield  made statements in  the Executive Summaries,  that misrepresented to investors  and

17

prospective  investors  that GO ECO had an experienced management team that included  people
who have never been members of GO ECO’s management or board of directors:
a. The Series A and B PPMs state: “GO ECO Manufacturing  has assembled  a team
of top professionals  who have over 100 years in manufacturing,  bottling,  and
product development   businesses  experience.” (Emphasis  added.)
b. The Series A and B PPMs state: “Invest  alongside   experienced  sector
professionals”  and “[t]he  Company  is  managed by seasoned business
professionals   with  extensive  business  and  sector  experience.  . . . At the present
time,  four  individua ls  are actively  involved  in the management  of the Company.”
(Emphasis  added.)
c. The Series A and B PPMs state: “The Company  has established  a Board of
Directors,  which  includes  highly   qualified   business  and  industry   professionals.
The Board of Directors will  assist the Management team in making  appropriate
decisions  and taking  effective action  . . . .”
d. The Series A and B PPMs and Series  A Executive  Summary  state that
[“Executive  1”] is the “COO” and a Director of GO ECO and describe  his
experience,  which  includes   roles  as  CEO  and  CFO  of  a Colorado-based
manufacturer of aluminum  sheet for packaging  solutions.
e. The Series A and B PPMs and Series A Executive  Summary state that
[“Managing Director 1”] is the “Managing  Director” of GO ECO and describe his
experience as “a seasoned player in  the Private Equity  and Venture Capital
arenas” and a “financial  engineer  of emerging  companies.”
72. Based on the representations  above, a reasonable investor  would  have understood
that GO ECO was headed by a management team with  extensive experience and that Executive  1
and Managing Director  1 were, respectively,  the COO/Director and  Managing  Director  of  the
company.
73. These statements were false and misleading. Executive  1 and Managing Director
1 were never employees  or directors  of GO ECO and were never paid  by GO ECO.
74. The statements regarding GO  ECO’s executive  leadership  and  board  of  directors
were false and misleading  when made, and Scarlett, Chatfield,  and GO ECO knew or were
reckless in not knowing,  and should  have known,  that these statements were false and

18

mis le a ding.   As the president  and CEO of GO ECO, Scarlett knew that Executive  1 and
Managing  Director 1 were not employees  or directors  of GO ECO.
75. Defendants omitted  to state material  facts that were necessary to  render their
statements regarding  GO  ECO’s executive  leadership  not  misleading.  These omissions  include
the failure  to disclose  that Executive 1 and Managing  Director were not employees  or directors
of GO ECO.
76. Scarlett and Chatfield  knew at the time  they distributed  the statements regarding
GO ECO’s executive leadership  and board of directors that the statements were false and
mis le a ding.
77. The above misrepresentations and omissions  with  respect to GO ECO’s executive
leadership  and  board  of  directors  were  material  to  investors  and  potential  investors  because,
among  other things, a reasonable investor  would  consider the existence and experience of the
company’s  management team to be important  facts when assessing the odds of the business
succeeding,  the legitimacy  of the company,  and the decision  to make an investment.
III. GO ECO PREFFERED STOCK IS A SECURITY.
78. The GO ECO preferred stock offered and sold  by the Defendants is a “security”
within  the meaning  of  Section  2(a)(1) of the Securities  Act and Section  3(a)(10) of the Exchange
Act,  w hic h  define  a  “security”  to  include,   among  other  things,   “any  .  .  .  stock.”
IV. DEFENDANTS’ MISREPRESENTATIONS WERE  MADE AND
DISSEMINATED “IN THE OFFER OR SALE” AND “IN CONNECTION WITH
THE PURCHASE OR SALE” OF SECURITIES.
79. Through  the  Offering  Documents,  Defendants offered and sold  securities in  the
form of non-voting  Series A and B P referred Stock of GO ECO to at least 26 investors.

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80. The misstatements  and omissions  alleged  herein  were made by  Defendants  and
disseminated  by  Scarlett and Chatfield  to  induce  investors  to  buy  the  securities  offered  through
the GO ECO offerings.
81. For  example,  a  number  of  the  misstatements  and  omissions   alleged  herein  were
made in  the written Offering  Documents  disseminated   to  investors  by  Scarlett and C ha tf ie ld,
such as the  P P Ms, Executive  Summaries,  and information   in  transmittal  emails.
82. As such, Defendants made material misstatements and omissions,  and Scarlett and
Chatfield  disseminated  material  misstatements  and  omissions,  in  the offer or sale of securities  as
defined  in Section  2(a)(1) of the Securities Act and in  connection  with  the purchase or sale of
securities  as  defined  in  Section  3(a)(10)  of  the  Exchange  Act  [15  U.S.C.  §§  77b(a)(1)  and
78c(a)(10)].
83. In connection  with the conduct  alleged  in  this  Complaint ,   Defendants,  directly   or
indirectly,  singly  or in concert with others,  made use of the means or instruments  of
transportation  or communication  in  interstate commerce, the  means or instrumentalit ies  of
interstate commerce, or of the   mails,   including   soliciting   investors   located   in   Colorado  and  other
states by telephone  and email,  providing   documents  containing  false and misleading  statements
to investors via   e ma il,  and  obtaining  funds from those investors  through  interstate commerce.
V. SCARLETT WAS  A CONTROL PERSON OF CHATFIELD AND GO ECO.
84. Scarlett had control  over Chatfield  and GO ECO during  the Relevant P eriod.
85. Scarlett, as founder,  president,  and sole owner of Chatfield  and founder, CEO,
president,  and  a  substantial   shareholder  of  GO  ECO, exercised control  over the management,
general operations,  and polices  of Chatfield  and GO ECO, as well as the specific activities  upon
which  their  violations   are based.

20

CLAIMS FOR RELIEF

Firs t Claim for Re lie f
Se ction 10(b) and Rule  10b-5 of the Exchange Act
(All  Defendants)

86. The SEC realleges and incorporates  by reference in  this   c la im  f or   r e lie f   the
allegations  set forth  above.
87. Defendants,  directly  or  indir e c tly,  in connection  with the purchase or sale of a
security,  and by the use of means or ins tr ume nta lit ie s  of interstate commerce, of the mails,  or of
the  facilities   of  a  national   securities  exchange,  knowingly   and  severely recklessly:  (a) employed
devices, schemes, or artifices to defraud; (b) made untrue statements of a material  fact or omitted
to state a material  fact necessary in  order to make the statements made, in the light  of the
circumstances  under  which  they  were  made,  not  misleading;   and  (c)  engaged in acts, practices,
or courses of business  which operated or would  operate as a fraud or deceit upon  other persons.
88. By engaging  in the conduct  described  above,  Defendants violated,   and  unless
restrained  and  enjoined   will   continue  to  violate,  Section  10(b) of the Exchange Act [15 U.S.C. §
78j(b)]  and  Rule  10b-5  thereunder [17 C.F.R. § 240.10b-5].
Se cond Claim  for Re lie f
Se ction 17(a)(2) of the  Se curitie s  Act
(Scarlett and Chatfield)

89. The SEC realleges and incorporates  by reference in  this   c la im  f or   r e lie f   the
allegations  set forth  above.
90. Scarlett and Chatfield,  directly  or indirectly,  in the offer or sale of securities,  by
use of the means or instruments  of transportation  or communication  in interstate commerce or by
use of the mails,  acting with  the requisite  state of mind,  obtained  money or property  by means of
an untrue statement of material  fact or omission  to state a material  fact necessary in order to

21

make  the  statements  made,  in  light   of  the  circumstances  under  which  they  were  made,  not
mis le a ding.
91. By virtue  of the foregoing, Scarlett and Chatfield,  directly  or  indirectly,   violated
and,  unless  restrained  and  enjoined,   will   again  violate   Section  17(a)(2)  of  the  Securities  Act  [15
U.S.C. § 77q(a)(2)].
Third  Claim  for  Re lie f
Se ction 17(a)(1) and (3) of  the  Se curitie s  Act
(All  Defendants)

92. The SEC realleges and incorporates  by reference in  this   c la im  f or   r e lie f   the
allegations  set forth  above.
93. Defendants, directly  or indirectly,  in the offer or sale of securities,  by use of the
means or instruments  of transportation  or communication  in interstate commerce or by use of the
mails,  acting with  the requisite  state of mind,  employed  a device,  scheme, or artifice to defraud
and engaged in  transactions,  practices, or a course of business  which operated or would  operate
as a fraud or deceit upon  purchasers.
94. By virtue  of the foregoing,  Defendants, directly  or indirectly,  violated  and, unless
restrained  and  enjoined,   will   again  violate  Sections  17(a)(1) and (3) of the Securities  Act [15
U.S.C. § 77q(a)(1)  and (3)].
Fo urth  Claim  for  Re lie f
Control Pe rs on Liability Under Section 20(a) of the Exchange Act for Violations of Section
10(b) of the  Exchange  Act and Rule  10b-5
 (Alternatively,   Against  Scarlett)

95. The SEC realleges and incorporates  by reference in  this   c la im  f or   r e lie f   the
allegations  set forth  above.
96. As alleged  above,  Defendants violated  Section  10(b) of the Exchange Act [15
U.S.C. § 78j(b)]  and Rule  10b-5  thereunder  [17  C.F.R. § 240.10b-5].

22

97. During the Relevant Period, Scarlett, as founder,  president,  and  sole  owner  of
Chatfield  and founder, CEO, president,  and a substantial  shareholder  of GO ECO, exercised
control  over the management,  general operations,  and polices  of Chatfield  and GO ECO, as well
as  the  specific  activities   upon  which  their  violations   are based.
98. By reason of the foregoing,  Scarlett is liable  as a control  person under Section
20(a) of the Exchange Act [15  U.S.C. § 78t(a)]  for Chatfield  and GO ECO’s violations  of
Section  10(b) of the Exchange Act [15 U.S.C. § 78j(b)]  and Rule 10b-5  thereunder  [17  C.F.R.  §
240.10b-5].
PRAYER FOR RELIEF

WHEREFORE, the SEC seeks the following  relief:
1. Find  that the Defendants committed  the violations  alleged  in this Complaint;
2. Enter  an  injunction,   in  a  form  consistent  with  Rule  65  of  the  Federal  Rules  of
Civil  P rocedure, temporarily,  preliminary  and, permanently  restraining  and enjoining  Defendants
and  their  agents,  servants,  employees,   attorneys,  and  accountants,  and  those  persons in  active
concert or participation  with them,  who  receive  actual  notice  of  the  Final  Judgment  by  personal
service or otherwise,  and each of them,  from engaging  in  transactions,  acts, practices, and
courses of business  described herein,  and from engaging   in  conduct  of  similar   purport  and  object
in  violation   of  Section  17(a)  of  Securities  Act  [15  U.S.C.  §  77q(a)],  Section  10(b)  of  the
Exchange  Act  [15  U.S.C.  §  78j(b)]   and  Exchange  Act  Rule  10b-5  [17  C.F.R.  §  240.10b-5]
thereunder.
3. Order Defendants to disgorge ill-gotten  gains  received during  the period  of
violative   conduct  and  pay  prejudgment   interest  on  such  ill-gotten  gains;

23

4. Order Defendants to pay civil  money  penalties  pursuant  to  Section  20(d)  of  the
Securities  Act [15  U.S.C. § 77t(d)]  and Section  21(d)(3)  of the Exchange  Act [15  U.S.C. §
78u(d)(3)];  and
5. Grant such other and further relief as this  Court may deem just  and proper.
JURY DEMAND

The SEC demands a trial  by jury  on all  claims  so triable.
Dated:  March 3, 2021  Respectfully  submitted,

 By: s/ Zachary T. Carlyle
  Zachary T. C a r lyle
Kenneth  E. Stalzer
U.S.  Securities  and  Exchange  Commission
1961  Stout  Street,  Suite   1700
Denver,  CO 80294-1961
Telephone:  303.844.1084  (Carlyle)
                   303.844.1055   (Stalzer)
Ema il: [email protected]
 [email protected]
Attorneys for Plaintiff
U.S. Securities and Exchange Commission

IN THE UNITED STATES DISTRICT COURT 
FOR THE DISTRICT OF COLORADO 

 

Civil Action No.  
 
UNITED STATES SECURITIES AND 
EXCHANGE COMMISION, 

Plaintiff, 

v. 

CHATFIELD PCS LTD., GO ECO 
MANUFACTURING, INC., and TRA JAY 
SCARLETT, 

Defendants. 

 
 
 

FILED UNDER SEAL 

COMPLAINT AND JURY DEMAND 

 
Plaintiff, United States Securities and Exchange Commission (“SEC”), alleges as follows 

against Defendants Chatfield PCS Ltd. (“Chatfield”), GO ECO Manufacturing, Inc. (“GO 

ECO”), and Tra Jay Scarlett (“Scarlett”) (collectively, “Defendants”).  

INTRODUCTION 

1. The SEC brings this emergency enforcement action to stop an ongoing offering 

fraud and misappropriation of investor assets by Defendants. Starting in approximately March 

2016, and continuing through at least January 2021 (the “Relevant Period”), Scarlett, through his 

company, Chatfield, raised at least $3.2 million from investors in two securities offerings by GO 

ECO, a purported environmentally friendly drink bottling and manufacturing company 

controlled by Scarlett. Instead of directing investor money to GO ECO, which never operated 

and, in fact, never had a bank account, Scarlett and Chatfield misappropriated the investor funds. 

Scarlett transferred hundreds of thousands of dollars of investors’ money to his personal bank 

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2 
 

accounts, made large cash withdrawals, and spent investor funds on, among other things, 

jewelry, precious metals, and a down payment and mortgage payments on Scarlett’s $1.25 

million dollar home.  

2. During the Relevant Period, virtually everything Defendants told GO ECO 

investors and prospective investors was materially false and misleading. Defendants lied to 

investors about how they planned to use investor funds, GO ECO’s business operations, GO 

ECO’s relationship with its supposed key client, and GO ECO’s management team. 

3. Defendants’ deceptive conduct continued even after the SEC staff contacted them 

in December 2020. In early January 2021, Defendants continued to solicit and obtain investor 

funds, making similar false and misleading representations to investors and prospective investors 

that they had been making since 2016.  

4. By engaging in this conduct, Defendants violated Sections 17(a)(1) and (3) of the 

Securities Act of 1933 (“Securities Act”), 15 U.S.C. § 77q(a), Section 10(b) of the Securities 

Exchange Act of 1934 (“Exchange Act”), 15 U.S.C. § 78j(b), and Exchange Act Rule 10b-5 

thereunder, 17 C.F.R. § 240.10b-5. Defendants Scarlett and Chatfield also violated Section 

17(a)(2) of the Securities Act. Unless restrained and enjoined, Defendants will continue to 

violate the federal securities laws. 

DEFENDANTS 

5. Tra Jay Scarlett, age 51, is a resident of Colorado Springs, Colorado. Scarlett is 

the founder, president, and sole owner of Chatfield and founder, chief executive officer (“CEO”), 

president, and a substantial shareholder of GO ECO. 

6. Chatfield PCS Ltd. is a Colorado limited liability company, with its principal 

place of business in Colorado Springs, Colorado. Chatfield is controlled by Scarlett and purports 

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3 
 

to provide financing to a portfolio of companies in the manufacturing, health, media, and real 

estate sectors. Chatfield is currently listed as noncompliant with the Colorado Secretary of State. 

7.  GO ECO Manufacturing, Inc. is a Colorado corporation with its principal place 

of business in Colorado Springs, Colorado. GO ECO is controlled by Scarlett and purports to be 

in the business of providing environmentally responsible product packaging and bottling services 

to commercial customers. GO ECO is currently listed as delinquent with the Colorado Secretary 

of State.  

JURISDICTION AND VENUE 
  

8. The SEC brings this action pursuant to authority conferred on it by Section 20(b) 

of the Securities Act [15 U.S.C. § 77t(b)] and Sections 21(d) and 21(e) of the Exchange Act [15 

U.S.C. §§ 78u(d) and 78u(e)] to restrain and enjoin the Defendants from engaging in the acts, 

practices, and courses of business described in this Complaint and acts, practices, and courses of 

business of similar purport and object. The SEC seeks permanent injunctions, disgorgement of 

ill-gotten gains derived from the conduct alleged in the Complaint plus prejudgment interest 

thereon, and civil penalties pursuant to Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)] 

and Section 21(d)(3) of the Exchange Act [15 U.S.C. §§ 78u(d)(3)].  

9. This Court has jurisdiction over this action pursuant to Sections 20(b), 20(d)(1), 

and 22(a) of the Securities Act [15 U.S.C. §§ 77t(b), 77t(d)(1), and 77v(a)], and Sections 

21(d)(1), 21(d)(3)(A), 21(e), and 27(a) of the Exchange Act [15 U.S.C. §§ 78u(d)(1), 

78u(d)(3)(A), 78u(e), and 78aa(a)].  

10. Venue is proper in the District of Colorado pursuant to Section 22(a) of the 

Securities Act [15 U.S.C. § 77v(a)] and Section 27(a) of the Exchange Act [15 U.S.C. § 78aa(a)] 

because many of the acts and transactions constituting violations of the Securities Act and 

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4 
 

Exchange Act occurred in this district, including misappropriation of investor funds through 

transactions at banks located in this district. In addition, Scarlett resides in this district, GO ECO 

and Chatfield have their principal places of business in this district, and one or more investors in 

GO ECO reside in this district. 

FACTS 

I. BACKGROUND 

A. Defendants Raised Money From Investors Through the Offer and Sale of GO 
ECO Securities. 

11. Scarlett formed Chatfield in November 2015 and GO ECO in March 2016. 

Scarlett formed GO ECO purportedly to provide packaging and bottling services to commercial 

customers. Scarlett operated Chatfield to solicit investors to invest in GO ECO. 

12.  Beginning in approximately March 2016, Scarlett and Chatfield engaged several 

individuals to, at Scarlett’s direction, solicit investments in GO ECO by cold-calling prospective 

investors. Once a prospective investor expressed interest in GO ECO, Chatfield’s staff typically 

emailed offering documents to them and often connected them with Scarlett so that he could 

solicit the investor over the telephone to make an investment in GO ECO.  

13. Among other things, Scarlett, or Chatfield’s staff acting at Scarlett’s direction, 

told investors that GO ECO made and/or bottled a sports drink for a protein drink company 

(hereinafter “Protein Drink Company”) and that the investment in GO ECO was expected to 

generate 20% to 25% annual returns when GO ECO would be sold to a larger company in the 

beverage industry. 

14. Protein Drink Company is a privately held corporation with its principal place of 

business in Clearwater, Florida. Protein Drink Company made protein-infused drinks.  

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15. Each investor and prospective investor in GO ECO was offered and sold GO ECO 

preferred stock. The Defendants conducted two offerings of GO ECO preferred stock. The first 

offering of GO ECO Series A preferred stock began in approximately March 2016 and lasted 

until about May 2019. The second offering of GO ECO Series B preferred stock began in 

approximately May 2019 and is ongoing.  

16. Scarlett, and Chatfield staff acting at Scarlett’s direction, distributed GO ECO 

offering documents to investors and prospective investors by email. The GO ECO offering 

materials included, among other things, transmittal emails with links and information about GO 

ECO and Protein Drink Company, private placement memoranda (“PPM”), subscription 

agreements (“Subscription Agreement”), executive summaries concerning GO ECO (“Executive 

Summary”), and investment instructions (“Investment Instructions”) (collectively, the “Offering 

Documents”). 

17. Scarlett and Chatfield distributed a GO ECO PPM to investors and prospective 

investors for each of the two securities offerings: a Series A PPM dated March 29, 2016 (“Series 

A PPM”), and a Series B PPM, dated May 3, 3019 (“Series B PPM”). The PPMs are nearly 

identical, except with respect to language that is not material for purposes of the allegations in 

this Complaint. These immaterial differences relate to the different series of shares, slight 

wording changes in the introduction, and the specific dollar amounts identified in the “Use of 

Proceeds” section. Versions of a Subscription Agreement, again substantially similar and 

identical in all material respects as they relate to the allegations in this Complaint, were also 

distributed by Scarlett and Chatfield for each of the two offerings. 

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18. Scarlett and Chatfield also distributed a GO ECO Executive Summary for the 

Series A offering (“Series A Executive Summary”) and the Series B offering (“Series B 

Executive Summary”).  

19. Scarlett and Chatfield distributed at least three forms of the Investment 

Instructions, all of which were identical, except for identifying Chatfield’s bank account and 

routing information for accounts at three different banks Chatfield used over the Relevant Period. 

Scarlett solely controlled each of Chatfield’s bank accounts.  

20. The statements in the PPMs and Subscription Agreements were made by GO 

ECO and Scarlett. Those documents were explicitly attributed to GO ECO on the face of the 

document. As the president and CEO of GO ECO, Scarlett had ultimate authority for the content 

of the PPMs and the distribution of those written materials to investors and prospective investors. 

The PPMs prominently disclose: “THE MANAGEMENT OF THE COMPANY [GO ECO] 

HAS PROVIDED ALL OF THE INFORMATION STATED HEREIN.” The signature line in 

the Subscription Agreements stated, “Accepted: GO ECO Manufacturing, Inc. By: . . . TJ 

Scarlett CEO.”  

21. The statements in the Executive Summaries and Investment Instructions were 

made by Chatfield and Scarlett. On the face of the documents, they were explicitly attributed to 

Chatfield. As the president and sole owner of Chatfield, Scarlett is the person with ultimate 

authority for the content of the Executive Summaries and Investment Instructions and the 

distribution of those written materials to investors. 

22. At times, Scarlett distributed Offering Documents to investors and prospective 

investors himself. For example, on May 17, 2019, Scarlett sent an email to an investor attaching 

the Series B PPM, Series B Subscription Agreement, and Investment Instructions.  

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23. During the Relevant Period, the Defendants raised over $3.2 million from at least 

26 investors in Colorado and other states through the GO ECO Series A and B preferred stock 

offerings. Scarlett and Chatfield raised funds from investors in GO ECO stock at least as recently 

as January 2021.   

24. Scarlett, as the principal of Chatfield and GO ECO, had the power to act and did 

act on behalf of Chatfield and GO ECO and, thus, his actions alleged herein as well as his state 

of mind, are imputed to Chatfield and GO ECO. 

B. Scarlett and Chatfield Misappropriated Investor Money. 

25. The Investment Instructions directed investors to purchase GO ECO preferred 

stock by sending a check or making a wire transfer to Chatfield’s bank accounts. The GO ECO 

investors’ money was received by and pooled in Chatfield’s bank accounts. 

26. Scarlett and GO ECO represented to investors that investor money sent to 

Chatfield in exchange for GO ECO stock would be delivered to GO ECO and used to fund and 

expand GO ECO’s business. 

27. None of the GO ECO investors’ money has ever been transferred from Chatfield 

to GO ECO. GO ECO has never opened any bank accounts. 

28. Instead of using investor money as represented, Scarlett, using his sole control 

over Chatfield’s bank accounts, misappropriated at least $2 million of investor funds through a 

variety of means, including transfers of funds from Chatfield’s bank accounts to his personal 

accounts and withdrawals of large amounts of cash. Scarlett’s misappropriation began in 

approximately March 2016, when Chatfield first received GO ECO investor funds, and has 

continued through at least January 2021. 

29. For example, on the same day that Scarlett withdrew $325,000 of investor funds 

from Chatfield’s account, he opened a new account in his own name and funded it with $318,000 

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of the money withdrawn from the Chatfield account. Scarlett used $273,828 of those funds to 

make a down payment in connection with the purchase of his $1.25 million home. Following the 

purchase of his home with investor funds, Scarlett made additional transfers from a Chatfield 

bank account holding investor funds to make mortgage payments on his home. 

30. Scarlett withdrew over $90,000 of cash in ATM transactions and over $860,000 in 

withdrawals from Chatfield accounts holding investor funds. 

31. In addition, Scarlett used funds in the Chatfield accounts holding investor funds to 

make payments for his personal expenses, including lease payments on his personal residence 

prior to purchasing it with investor funds, purchases of precious metals, and purchases of 

jewelry.  

32. Scarlett used funds in the Chatfield accounts holding investor funds for other 

personal expenses, such as travel and fine dining. Scarlett and Chatfield also used funds from 

GO ECO investors for the construction of a failed bar and to make payments to Scarlett’s family 

members.  

33. Additionally, Scarlett and Chatfield used GO ECO investor money to make 

approximately $560,000 of payments to Chatfield staff.   

II. SCARLETT, CHATFIELD, AND GO ECO MADE MATERIAL 
MISREPRESENTATIONS AND OMISSIONS IN CONNECTION WITH THE 
SECURITIES OFFERINGS. 

34. In the Offering Documents distributed to investors and prospective investors, 

Defendants made numerous materially false and misleading statements and omissions regarding, 

among other things, the use of investor funds, GO ECO’s business operations, GO ECO’s 

relationship with its purported key customer Protein Drink Company, and GO ECO’s 

management team. 

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A. Scarlett and GO ECO Made False and Misleading Statements About the Use 
of Investor Funds. 

35. Throughout the Relevant Period, in the PPMs and Subscription Agreements sent 

to investors and prospective investors, Scarlett and GO ECO made false and misleading 

statements and omitted material information regarding how investor funds would be used. 

36.  The Subscription Agreements for the Series A and B offerings stated that all GO 

ECO investor funds would be placed in an escrow account until a minimum offering proceeds 

amount of $1,000,000 was raised from investors, at which point “all proceeds from sale of 

Shares will be delivered directly to the Company [GO ECO] and be available for its use.” 

(Emphasis added). Similarly, the Series A and B PPMs state that “[a]ll proceeds from the sale of 

Shares up to $1,000,000 will be deposited in an escrow account. Upon the sale of $1,000,000 of 

Shares, all proceeds will be delivered directly to the Company’s [GO ECO’s] corporate account 

and be available for use by the Company at its discretion.” (Emphasis added). 

37. The Series A and B PPMs represented that GO ECO was selling shares to raise 

capital that would be used by GO ECO to fund and expand its business:  

a. The Series A PPM stated that “The Company [GO ECO] is raising equity capital 
to develop and complete the construction of a modern green manufacturing 
facility . . . .” 

b. The Series B PPM stated that “The Company [GO ECO] is raising equity capital 
to make placements into expanding our worldwide Manufacturing reach . . . .” 

c. The Series A and B PPMs stated that “Proceeds from the sale of Shares will be 
used to: purchase real estate, purchase packing and bottling equipment, purchase 
confectionary equipment, construction costs, manufacturing expenses, staffing, 
and working capital.”   

38. Scarlett, or Chatfield’s staff acting at Scarlett’s direction, distributed these 

statements to investors and prospective investors during the Relevant Period by email. 

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39. Based on the representations set forth in paragraphs 36 and 37 above, a reasonable 

investor would have understood that the money they invested in GO ECO stock would be placed 

into an escrow account and/or transferred directly to GO ECO to fund and expand its business. 

40. Scarlett and GO ECO further represented in the Series A PPM that the “Offering 

is being sold by the Managing Members of the Company [GO ECO]. No compensatory sales 

fees or related commissions will be paid to such Managing Members. Registered broker [sic] or 

dealers who are members of the FINRA [sic] and who enter into a Participating Dealer 

Agreement with the Company [GO ECO] may sell shares. Such brokers or dealers may receive 

commissions up to ten percent (10%) of the price of the Shares sold.” The Series B PPM reads 

identically to the Series A PPM except that the percent in parentheses is incorrectly stated as 5%. 

41. In addition, the Series A and B PPMs both state that Scarlett takes no current 

salary and that there is “no accrued compensation that is due any member of Management.” 

42. Based on the representations set forth in paragraphs 40 and 41, a reasonable 

investor would have understood that no fees or commissions, or other immediate compensation, 

would be deducted from their investment in GO ECO to make payments to Scarlett, Chatfield or 

Chatfield staff, because Scarlett is listed as the CEO of GO ECO in the PPMs, and none of the 

Defendants is a registered broker or dealer. 

43. The statements regarding the use of investor monies are false and misleading. 

None of the GO ECO investors’ money was placed into an escrow account, nor was any of it 

transferred to GO ECO, as GO ECO never opened a bank account. Instead, investor funds were 

misappropriated by Scarlett and Chatfield, contrary to the representations that the money would 

be provided directly to GO ECO and that Scarlett, as a member of GO ECO management, would 

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not receive compensation for selling the shares, and that only registered broker dealers may be 

compensated for selling shares. 

44. Each of these statements regarding use of investor monies was false and 

misleading when made, and Scarlett and GO ECO knew or were reckless in not knowing, and 

should have known, that these statements were false and misleading because Scarlett intended to 

and immediately began misappropriating investor monies. 

45. Scarlett and GO ECO omitted to state material facts that were necessary to render 

their disclosures regarding the uses of investor funds not misleading. These omissions include 

the actual use of investor funds as described above. 

46. In addition, Chatfield knew that the PPMs and Subscription Agreements 

contained false and misleading information concerning the uses of GO ECO investor funds at the 

time it distributed them to potential investors. 

47. The above misrepresentations and omissions as to the use of investor proceeds 

were material to investors and potential investors because the misappropriation and diversion by 

Scarlett and Chatfield of all or substantially all investor money that was invested in GO ECO 

would be material to any reasonable investor. 

B. Scarlett and GO ECO Made False and Misleading Statements About GO 
ECO’s Business Operations and Financial Performance. 

48. Scarlett and GO ECO made materially false and misleading statements to 

investors and prospective investors about GO ECO’s business operations and financial 

performance. 

49. In the GO ECO PPMs distributed to investors and prospective investors 

throughout the Relevant Period, Scarlett and GO ECO represented that GO ECO was an 

operating bottling and packaging company with an existing customer base. For example:  

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a. The Series A PPM states: “GO ECO Manufacturing, Inc. . . . provides packaging 
and bottling services for commercial customers.”  (Emphasis added.) 

b. The Series B PPM states: “GO ECO Manufacturing, Inc. . . . specializes in 
providing services for high quality bottling production as well as innovative 
product packaging.” (Emphasis added.) 

c. The Series A and B PPMs state: “The Company also maintains a solid core of 
business in propriety products marketed and created for both wholesale and retail 
sale.” (Emphasis added.) 

d. The Series A and B PPMs state: “The Company seeks to maintain and expand a 
presence in a variety of markets including but not limited to; traditional bottling, 
shot type bottle packaging, case design and packaging, and new product 
development.” (Emphasis added.) 

e. The Series B PPM states: “The Company is raising equity capital to make 
placements into expanding our worldwide Manufacturing reach that consistently 
develops new ways of streamlining the packaging process, as well as vertically 
integrate and consistently expand on current market share with existing and 
freshly developed beverages that are penetrating the market.” (Emphasis added.) 

50. Additionally, the Series B PPM included a financial statement that showed 

revenues of $17,099,816 and net ordinary income of $10,073,334 from manufacturing and 

packaging in 2017. 

51. Scarlett, or Chatfield’s staff acting at Scarlett’s direction, distributed these 

statements to investors and prospective investors during the Relevant Period by email. 

52. Based on these statements, a reasonable investor would have understood that GO 

ECO is a bottling and packaging company with existing operations and customers and millions 

of dollars of annual revenues and profits. 

53. The statements regarding GO ECO’s business operations and financial 

performance are false and misleading. GO ECO has never had an active manufacturing or 

bottling business or operations. GO ECO has never had any manufacturing or bottling facilities, 

equipment, customers, revenues, or profits. Nor has it ever had any bank accounts or filed any 

tax returns. 

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54. The statements regarding GO ECO’s business operations and financial 

performance were false and misleading when made, and Scarlett and GO ECO knew or were 

reckless in not knowing, and should have known, that these statements were false and 

misleading. As the president and CEO of GO ECO, Scarlett knew that GO ECO did not have 

existing operations, customers, or millions of dollars of annual revenues and profits.   

55. Scarlett and GO ECO omitted to state material facts that were necessary to render 

their disclosures and representations regarding GO ECO’s business operations and financial 

performance not misleading. These omissions include that GO ECO had no active business 

operations. 

56. In addition, Chatfield, through Scarlett, knew that the PPMs contained false and 

misleading information about GO ECO’s business operations and financial performance at the 

time it distributed them to potential investors.  

57. The above misrepresentations concerning GO ECO’s business operations and 

financial performance were material to investors and prospective investors because a reasonable 

investor would consider whether a company has an existing business, as well as the revenue and 

profits generated from that business, when assessing the risks and potential returns of making an 

investment in the company. 

C. Defendants Made False and Misleading Statements Regarding GO ECO’s 
Business Relationship with its Purported Key Client, Protein Drink 
Company. 

58. Defendants made numerous materially false and misleading statements to 

investors and prospective investors regarding the business relationship between GO ECO and its 

purported key client, Protein Drink Company. 

59. Throughout the Relevant Period, Defendants heavily touted the purported 

relationship between GO ECO and Protein Drink Company when they solicited investors. 

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Investors were told orally by Scarlett or Chatfield staff that GO ECO either made the Protein 

Drink Company sports drinks itself or had an exclusive contract with Protein Drink Company to 

make or bottle its drinks. Defendants also often emailed detailed presentations purporting to 

describe Protein Drink Company’s highly successful products and business to prospective 

investors along with the GO ECO Offering Documents that represented that GO ECO provides 

bottling services to customers. 

60. Scarlett and GO ECO made statements in the Series A and B PPMs, and Scarlett 

and Chatfield made statements in the Executive Summaries, regarding the supposed business 

relationship between GO ECO and Protein Drink Company:  

a. The Series A PPM states: “GO ECO Manufacturing has entered into a strategic 
partnership with [Protein Drink Company], one of the fastest growing healthy 
shot type beverage companies in the nation. At present they will be GO ECO 
Manufacturing’s number one client and will expand to produce multiple products 
through their assembly lines.” (Emphasis added.)   

b. The Series A Executive Summary states: “At the end of 2015, Go-Eco 
Manufacturing negotiated an exclusive production contract with [Protein Drink 
Company], a Florida based beverage company. Right now, [Protein Drink 
Company] is the number one protein shot beverage in the world, selling its 
products in over 80 thousand big box stores nationwide, including Wal-Mart, 
Target, 7-Eleven, etc.” (Emphasis added.)  

c. The Series B Executive Summary states: “At the end of 2015, Go-Eco 
Manufacturing negotiated an exclusive production contract with [Protein Drink 
Company], a Florida based beverage company. [Protein Drink Company] has the 
best tasting Protein water on the market, selling its products in over 100 thousand 
big box stores nation-wide, including CVS, Wegmans, Safeway, Target, 7-
Eleven, etc.” (Emphasis added.)   

d. In the Series A and B PPMs, Protein Drink Company’s product was listed as a 
GO ECO “Key Account[].” (Emphasis added.)   

61. Chatfield and Scarlett distributed these statements to investors and prospective 

investors during the Relevant Period by email.  

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62. Protein Drink Company stopped production of all drinks in April 2019, and exited 

the beverage industry entirely in the first quarter of 2020. After April 2019, Scarlett and 

Chatfield have continued to tout the purported business relationship between GO ECO and 

Protein Drink Company in the Series B Executive Summary and in emails and oral 

representations to investors and prospective investors.  

63. On September 1, 2020, Chatfield sent an email to a prospective investor that 

stated in part: 

a. “Go-Eco Manufacturing has positioned itself to take full advantage of a niche 
opportunity within the bottling industry.  This enabled Go-Eco Manufacturing to 
negotiate an exclusive production contract with [Protein Drink Company], a 
Florida based beverage company. . . . Right now, [Protein Drink Company] is the 
number one protein shot beverage company in the world selling its products in 
over 60 thousand big box stores nation wide, i.e. Wal-Mart, Target, 7-Eleven, 
etc.” (Emphasis added.)   
 

64. That investor invested $10,000 in GO ECO on September 17, 2020, and another 

$10,000 on January 7, 2021.  

65. A reasonable investor would have understood from the statements in paragraphs 

60 and 63 that GO ECO had a strategic partnership and exclusive production contract with a key 

client, Protein Drink Company, for whom GO ECO provided manufacturing and/or packaging 

services.  

66. The statements regarding GO ECO’s business relationship with Protein Drink 

Company are false and misleading. GO ECO never entered into a strategic partnership with 

Protein Drink Company, nor did it ever have an exclusive production contract with Protein Drink 

Company. GO ECO has never performed any services for Protein Drink Company, made any 

products for Protein Drink Company, invoiced Protein Drink Company, or been paid by Protein 

Drink Company for anything.  

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67. The statements regarding GO ECO’s business relationship with Protein Drink 

Company were false and misleading when made, and Scarlett, Chatfield, and GO ECO knew or 

were reckless in not knowing, and should have known, that these statements were false and 

misleading. As the president and CEO of GO ECO, Scarlett knew that GO ECO did not have a 

strategic partnership or exclusive production contract with Protein Drink Company and did not 

provide manufacturing or packaging services for Protein Drink Company. 

68. Further, the Defendants omitted to state material facts that were necessary to 

render their disclosures and representations regarding the relationship between GO ECO and 

Protein Drink Company not misleading. These omissions include that GO ECO did not have an 

exclusive production contract with Protein Drink Company or provide services for Protein Drink 

Company. 

69. Scarlett and Chatfield knew at the time they distributed the statements regarding 

GO ECO’s business relationship with Protein Drink Company that the statements were false and 

misleading. 

70. The above misrepresentations and omissions with respect to the relationship 

between GO ECO and Protein Drink Company were material to investors and potential investors 

because, among other things, a strategic partnership and exclusive production contract with a 

leading beverage company would be important to a reasonable investor’s decision to invest in 

GO ECO.  

D. Defendants Made False and Misleading Statements Regarding GO ECO’s 
Management Team. 

71. Scarlett and GO ECO made statements in the Series A and B PPMs, and Scarlett 

and Chatfield made statements in the Executive Summaries, that misrepresented to investors and 

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prospective investors that GO ECO had an experienced management team that included people 

who have never been members of GO ECO’s management or board of directors: 

a. The Series A and B PPMs state: “GO ECO Manufacturing has assembled a team 
of top professionals who have over 100 years in manufacturing, bottling, and 
product development businesses experience.” (Emphasis added.) 

b. The Series A and B PPMs state: “Invest alongside experienced sector 
professionals” and “[t]he Company is managed by seasoned business 
professionals with extensive business and sector experience. . . . At the present 
time, four individuals are actively involved in the management of the Company.” 
(Emphasis added.) 

c. The Series A and B PPMs state: “The Company has established a Board of 
Directors, which includes highly qualified business and industry professionals. 
The Board of Directors will assist the Management team in making appropriate 
decisions and taking effective action . . . .”  

d. The Series A and B PPMs and Series A Executive Summary state that 
[“Executive 1”] is the “COO” and a Director of GO ECO and describe his 
experience, which includes roles as CEO and CFO of a Colorado-based 
manufacturer of aluminum sheet for packaging solutions.  

e. The Series A and B PPMs and Series A Executive Summary state that 
[“Managing Director 1”] is the “Managing Director” of GO ECO and describe his 
experience as “a seasoned player in the Private Equity and Venture Capital 
arenas” and a “financial engineer of emerging companies.”  

72. Based on the representations above, a reasonable investor would have understood 

that GO ECO was headed by a management team with extensive experience and that Executive 1 

and Managing Director 1 were, respectively, the COO/Director and Managing Director of the 

company.  

73. These statements were false and misleading. Executive 1 and Managing Director 

1 were never employees or directors of GO ECO and were never paid by GO ECO. 

74. The statements regarding GO ECO’s executive leadership and board of directors 

were false and misleading when made, and Scarlett, Chatfield, and GO ECO knew or were 

reckless in not knowing, and should have known, that these statements were false and 

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misleading. As the president and CEO of GO ECO, Scarlett knew that Executive 1 and 

Managing Director 1 were not employees or directors of GO ECO.  

75. Defendants omitted to state material facts that were necessary to render their 

statements regarding GO ECO’s executive leadership not misleading. These omissions include 

the failure to disclose that Executive 1 and Managing Director were not employees or directors 

of GO ECO. 

76. Scarlett and Chatfield knew at the time they distributed the statements regarding 

GO ECO’s executive leadership and board of directors that the statements were false and 

misleading. 

77. The above misrepresentations and omissions with respect to GO ECO’s executive 

leadership and board of directors were material to investors and potential investors because, 

among other things, a reasonable investor would consider the existence and experience of the 

company’s management team to be important facts when assessing the odds of the business 

succeeding, the legitimacy of the company, and the decision to make an investment.  

III. GO ECO PREFFERED STOCK IS A SECURITY. 

78. The GO ECO preferred stock offered and sold by the Defendants is a “security” 

within the meaning of Section 2(a)(1) of the Securities Act and Section 3(a)(10) of the Exchange 

Act, which define a “security” to include, among other things, “any . . . stock.” 

IV. DEFENDANTS’ MISREPRESENTATIONS WERE MADE AND 
DISSEMINATED “IN THE OFFER OR SALE” AND “IN CONNECTION WITH 
THE PURCHASE OR SALE” OF SECURITIES.  

79. Through the Offering Documents, Defendants offered and sold securities in the 

form of non-voting Series A and B Preferred Stock of GO ECO to at least 26 investors.  

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80. The misstatements and omissions alleged herein were made by Defendants and 

disseminated by Scarlett and Chatfield to induce investors to buy the securities offered through 

the GO ECO offerings. 

81. For example, a number of the misstatements and omissions alleged herein were 

made in the written Offering Documents disseminated to investors by Scarlett and Chatfield, 

such as the PPMs, Executive Summaries, and information in transmittal emails.   

82. As such, Defendants made material misstatements and omissions, and Scarlett and 

Chatfield disseminated material misstatements and omissions, in the offer or sale of securities as 

defined in Section 2(a)(1) of the Securities Act and in connection with the purchase or sale of 

securities as defined in Section 3(a)(10) of the Exchange Act [15 U.S.C. §§ 77b(a)(1) and 

78c(a)(10)]. 

83. In connection with the conduct alleged in this Complaint, Defendants, directly or 

indirectly, singly or in concert with others, made use of the means or instruments of 

transportation or communication in interstate commerce, the means or instrumentalities of 

interstate commerce, or of the mails, including soliciting investors located in Colorado and other 

states by telephone and email, providing documents containing false and misleading statements 

to investors via email, and obtaining funds from those investors through interstate commerce. 

V. SCARLETT WAS A CONTROL PERSON OF CHATFIELD AND GO ECO. 

84. Scarlett had control over Chatfield and GO ECO during the Relevant Period. 

85. Scarlett, as founder, president, and sole owner of Chatfield and founder, CEO, 

president, and a substantial shareholder of GO ECO, exercised control over the management, 

general operations, and polices of Chatfield and GO ECO, as well as the specific activities upon 

which their violations are based. 

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CLAIMS FOR RELIEF 
 

First Claim for Relief 
Section 10(b) and Rule 10b-5 of the Exchange Act  

(All Defendants) 
 

86. The SEC realleges and incorporates by reference in this claim for relief the 

allegations set forth above.  

87. Defendants, directly or indirectly, in connection with the purchase or sale of a 

security, and by the use of means or instrumentalities of interstate commerce, of the mails, or of 

the facilities of a national securities exchange, knowingly and severely recklessly: (a) employed 

devices, schemes, or artifices to defraud; (b) made untrue statements of a material fact or omitted 

to state a material fact necessary in order to make the statements made, in the light of the 

circumstances under which they were made, not misleading; and (c) engaged in acts, practices, 

or courses of business which operated or would operate as a fraud or deceit upon other persons. 

88. By engaging in the conduct described above, Defendants violated, and unless 

restrained and enjoined will continue to violate, Section 10(b) of the Exchange Act [15 U.S.C. § 

78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. 

Second Claim for Relief 
Section 17(a)(2) of the Securities Act 

(Scarlett and Chatfield) 
 

89. The SEC realleges and incorporates by reference in this claim for relief the 

allegations set forth above.  

90. Scarlett and Chatfield, directly or indirectly, in the offer or sale of securities, by 

use of the means or instruments of transportation or communication in interstate commerce or by 

use of the mails, acting with the requisite state of mind, obtained money or property by means of 

an untrue statement of material fact or omission to state a material fact necessary in order to 

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make the statements made, in light of the circumstances under which they were made, not 

misleading. 

91. By virtue of the foregoing, Scarlett and Chatfield, directly or indirectly, violated 

and, unless restrained and enjoined, will again violate Section 17(a)(2) of the Securities Act [15 

U.S.C. § 77q(a)(2)]. 

Third Claim for Relief 
Section 17(a)(1) and (3) of the Securities Act 

(All Defendants) 
 

92. The SEC realleges and incorporates by reference in this claim for relief the 

allegations set forth above.  

93. Defendants, directly or indirectly, in the offer or sale of securities, by use of the 

means or instruments of transportation or communication in interstate commerce or by use of the 

mails, acting with the requisite state of mind, employed a device, scheme, or artifice to defraud 

and engaged in transactions, practices, or a course of business which operated or would operate 

as a fraud or deceit upon purchasers. 

94. By virtue of the foregoing, Defendants, directly or indirectly, violated and, unless 

restrained and enjoined, will again violate Sections 17(a)(1) and (3) of the Securities Act [15 

U.S.C. § 77q(a)(1) and (3)]. 

Fourth Claim for Relief 
Control Person Liability Under Section 20(a) of the Exchange Act for Violations of Section 

10(b) of the Exchange Act and Rule 10b-5 
 (Alternatively, Against Scarlett) 

 
95. The SEC realleges and incorporates by reference in this claim for relief the 

allegations set forth above. 

96. As alleged above, Defendants violated Section 10(b) of the Exchange Act [15 

U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. 

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97. During the Relevant Period, Scarlett, as founder, president, and sole owner of 

Chatfield and founder, CEO, president, and a substantial shareholder of GO ECO, exercised 

control over the management, general operations, and polices of Chatfield and GO ECO, as well 

as the specific activities upon which their violations are based. 

98. By reason of the foregoing, Scarlett is liable as a control person under Section 

20(a) of the Exchange Act [15 U.S.C. § 78t(a)] for Chatfield and GO ECO’s violations of 

Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 

240.10b-5].  

PRAYER FOR RELIEF 
 

WHEREFORE, the SEC seeks the following relief: 

1. Find that the Defendants committed the violations alleged in this Complaint;  

2. Enter an injunction, in a form consistent with Rule 65 of the Federal Rules of 

Civil Procedure, temporarily, preliminary and, permanently restraining and enjoining Defendants 

and their agents, servants, employees, attorneys, and accountants, and those persons in active 

concert or participation with them, who receive actual notice of the Final Judgment by personal 

service or otherwise, and each of them, from engaging in transactions, acts, practices, and 

courses of business described herein, and from engaging in conduct of similar purport and object 

in violation of Section 17(a) of Securities Act [15 U.S.C. § 77q(a)], Section 10(b) of the 

Exchange Act [15 U.S.C. § 78j(b)] and Exchange Act Rule 10b-5 [17 C.F.R. § 240.10b-5] 

thereunder. 

3. Order Defendants to disgorge ill-gotten gains received during the period of 

violative conduct and pay prejudgment interest on such ill-gotten gains; 

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4. Order Defendants to pay civil money penalties pursuant to Section 20(d) of the 

Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. § 

78u(d)(3)]; and 

5. Grant such other and further relief as this Court may deem just and proper. 

JURY DEMAND 
 
The SEC demands a trial by jury on all claims so triable.   

Dated:  March 3, 2021  Respectfully submitted, 
   
 By: s/ Zachary T. Carlyle 
  Zachary T. Carlyle 

Kenneth E. Stalzer 
U.S. Securities and Exchange Commission 
1961 Stout Street, Suite 1700 
Denver, CO 80294-1961 
Telephone: 303.844.1084 (Carlyle) 
                   303.844.1055 (Stalzer) 
Email: [email protected] 
 [email protected] 
Attorneys for Plaintiff 
U.S. Securities and Exchange Commission 

 
 

Case 1:21-cv-00641-DDD-KMT   Document 1   Filed 03/03/21   USDC Colorado   Page 23 of 23


	Defendants
	Jurisdiction and Venue
	I. BACKGROUND
	A. Defendants Raised Money From Investors Through the Offer and Sale of GO ECO Securities.
	B. Scarlett and Chatfield Misappropriated Investor Money.

	II. Scarlett, Chatfield, and GO ECO MADE MATERIAL MISREPRESENTATIONS AND OMISSIONS IN CONNECTION WITH the SECURITIES OFFERINGS.
	A. Scarlett and GO ECO Made False and Misleading Statements About the Use of Investor Funds.
	B. Scarlett and GO ECO Made False and Misleading Statements About GO ECO’s Business Operations and Financial Performance.
	C. Defendants Made False and Misleading Statements Regarding GO ECO’s Business Relationship with its Purported Key Client, Protein Drink Company.
	D. Defendants Made False and Misleading Statements Regarding GO ECO’s Management Team.

	III. GO ECO Preffered Stock is a Security.
	IV. Defendants’ Misrepresentations Were Made and Disseminated “In the Offer or Sale” and “In Connection with the Purchase or Sale” of Securities.
	V. scarlett was a control person of Chatfield and go eco.
	claims for relief
	Prayer for relief
	JURY DEMAND