SEC v. EarthSource Minerals International, LLC; Abundant Resource Development, LLLP; Jason M. Wendt; Armando Costabile; Michael J. Palermo; and Premier Minerals International, LLC, No. LR-25040, Western District of New York (Mar. 2, 2021) — Press Release
raw: EarthSource Minerals International, LLC et al.
EarthSource Minerals International, LLC et al., No. 6:21-cv-06198 (Mar. 2, 2021)
summary
The SEC charged Jason M. Wendt, Armando Costabile, and Michael J. Palermo with a $5.2 million securities fraud scheme promising high returns from diamond and gold mining operations, resulting in settlements with civil penalties and disgorgement.
paragraph
The SEC alleged that Wendt and Costabile sold at least $4.7 million of fraudulent securities promising 10% monthly returns from 'diamond-flipping' and gold mining, while Palermo sold an additional $501,906 of securities promising 20% quarterly returns. The defendants allegedly misappropriated over $340,000 of investor funds for personal use and Ponzi-like payouts. The settlements, pending court approval, require Palermo to pay $340,005 in disgorgement plus a $125,000 civil penalty, while Wendt and Costabile each owe $100,000 civil penalties.
narrative
The Securities and Exchange Commission (SEC) charged Jason M. Wendt, Armando Costabile, and Michael J. Palermo with a securities fraud scheme that raised over $5.2 million from approximately 256 investors. The defendants allegedly sold fraudulent securities promising high returns from diamond and gold mining operations, including 'diamond-flipping' in Liberia. Wendt and Costabile falsely promised 10% monthly returns, while Palermo misled 22 investors with 20% quarterly return promises. The defendants allegedly misappropriated over $340,000 of investor funds for personal use and Ponzi-like payouts. The SEC alleged that the defendants violated Sections 17(a) of the Securities Act and 10(b) of the Exchange Act. The defendants settled without admitting or denying guilt, agreeing to injunctions, with Palermo ordered to pay $340,005 in disgorgement plus $125,000 in penalties, and Wendt and Costabile each owing $100,000 civil penalties. The settlements are subject to court approval.
Classified ponzi(confidence 95%). EDGAR detection: forms Form D· recall 35% / precision 15%. detection rule →
Parties
Securities and Exchange CommissionEarthsource Minerals International, LLCJason M. WendtMichael J. PalermoArmando CostabileAbundant Resource Development, LLLPPremier Minerals International, LLC
Keywords
earthsourceminerals internationalearthsource mineralswendt costabilesecuritieswendtpalermosecurities exchangefalsely claimedmineralsinternationalllccostabileinvestorsmining
Exhibits & Attached Documents (1)
Extracted insights
Dollar amounts 8
- $4.70M $4.7 million $1M–$10M
- $502K $501,906 $100K–$1M
- $340K $340,005 $100K–$1M
- $340K $340,000 $100K–$1M
- $200K $200,000 $100K–$1M
- $125K $125,000 $100K–$1M
- $100K $100,000 $100K–$1M
- $100K $100,000 $100K–$1M
Entities 6
- person armando costabile
- company earthsource minerals international, llc
- person jason m. wendt
- company securities
- agency Securities and Exchange Commission
- agency the securities and exchange commission
Triples 38
- SEC charged Jason M. Wendt and Armando Costabile with the fraudulent offer and sale of at least $4.7 million of securities to approximately 234 investors through their companies, EarthSource Minerals International, LLC and Abundant Resource Development
- Securities and Exchange Commission charged Jason M. Wendt and Armando Costabile with the fraudulent offer and sale of at least $4.7 million of securities
- Securities and Exchange Commission charged EarthSource Minerals International, LLC and Abundant Resource Development
- Jason M. Wendt is New York resident
- Armando Costabile is New York resident
- Securities and Exchange Commission v. EarthSource Minerals International, LLC et al. filed March 1, 2021
- Litigation Release No. 25040 dated March 2, 2021
- Securities and Exchange Commission charged New York residents Jason M. Wendt and Armando Costabile with the fraudulent offer and sale of at least $4.7 million of securities to approximately 234 investors through their companies, EarthSource Minerals International, LLC and Abundant Resource Development, L
- EarthSource Minerals International, LLC charged with fraud fraudulent offer and sale of at least $4.7 million of securities to approximately 234 investors
- Jason M. Wendt charged with fraud fraudulent offer and sale of at least $4.7 million of securities to approximately 234 investors
- Armando Costabile charged with fraud fraudulent offer and sale of at least $4.7 million of securities to approximately 234 investors
- Securities and Exchange Commission charged New York residents Jason M. Wendt and Armando Costabile with the fraudulent offer and sale of at least $4.7 million of securities to approximately 234 investors through their companies, EarthSource Minerals International, LLC and Abundant Resource Development, L
- Securities and Exchange Commission charged New York residents Jason M. Wendt and Armando Costabile with the fraudulent offer and sale of at least $4.7 million of securities to approximately 234 investors through their companies, EarthSource Minerals International, LLC and Abundant Resource Development, L
- Securities and Exchange Commission charged New York residents Jason M. Wendt and Armando Costabile with the fraudulent offer and sale of at least $4.7 million of securities to approximately 234 investors through their companies, EarthSource Minerals International, LLC and Abundant Resource Development, L
- Securities and Exchange Commission charged New York residents Jason M. Wendt and Armando Costabile with the fraudulent offer and sale of at least $4.7 million of securities to approximately 234 investors through their companies, EarthSource Minerals International, LLC and Abundant Resource Development, L
- Jason M. Wendt charged with fraud
- Armando Costabile charged with fraud
- EarthSource Minerals International, LLC offered securities
- Abundant Resource Development, L offered securities
- Jason M. Wendt fraudulently sold $4.7 million in securities
- Armando Costabile fraudulently sold $4.7 million in securities
- EarthSource Minerals International, LLC sold securities to 234 investors
- Abundant Resource Development, L sold securities to 234 investors
- SEC charged Jason M. Wendt and Armando Costabile
- SEC filed lawsuit against EarthSource Minerals International, LLC et al.
- SEC initiated action March 1, 2021
- The Securities and Exchange Commission charged Jason M. Wendt and Armando Costabile
- Jason M. Wendt and Armando Costabile offered fraudulent sale of at least $4.7 million of securities to approximately 234 investors
- The fraudulent sale was made through EarthSource Minerals International, LLC and Abundant Resource Development, L
- Securities and Exchange Commission v. EarthSource Minerals International, LLC et al. filed case No. 6:21-cv-06198 on March 1, 2021
- SEC charged Jason M. Wendt and Armando Costabile
- Jason M. Wendt and Armando Costabile fraudulent offer and sale at least $4.7 million of securities
- Jason M. Wendt and Armando Costabile fraudulent offer and sale to approximately 234 investors
- Jason M. Wendt and Armando Costabile fraudulent offer and sale through their companies, EarthSource Minerals International, LLC and Abundant Resource Development
- SEC charged Jason M. Wendt and Armando Costabile
- Jason M. Wendt and Armando Costabile fraudulent offer and sale at least $4.7 million of securities
- Jason M. Wendt and Armando Costabile fraudulent offer and sale to approximately 234 investors
- Jason M. Wendt and Armando Costabile fraudulent offer and sale through their companies, EarthSource Minerals International, LLC and Abundant Resource Development
PDF (from attached: complaint)
Text layers
Extracted body text (3,450c)
SEC Charges Mining Company Founders and Executive with Fraud Litigation Release No. 25040 / March 2, 2021 Securities and Exchange Commission v. EarthSource Minerals International, LLC et al., No. 6:21-cv-06198 (W.D.N.Y. filed March 1, 2021) The Securities and Exchange Commission charged New York residents Jason M. Wendt and Armando Costabile with the fraudulent offer and sale of at least $4.7 million of securities to approximately 234 investors through their companies, EarthSource Minerals International, LLC and Abundant Resource Development, LLLP between September 2014 and December 2019. The SEC also charged Florida resident Michael J. Palermo, EarthSource's Chief Investment Officer, with the fraudulent offer and sale of an additional $501,906 of securities to 22 investors through Palermo's company, Premier Minerals International, LLC, and the misappropriation of the majority of the investors' money raised. According to the SEC's complaint, Wendt and Costabile falsely claimed EarthSource could pay investors returns of 10% per month by engaging in "diamond flipping" - purchasing diamonds in Liberia and exporting them for resale in the United States at significantly higher prices. As alleged, contrary to their representations, EarthSource actually lost money on the diamond flipping transactions, and Wendt and Costabile siphoned money from the program to pay for EarthSource's unsuccessful mining operations. The complaint alleges that Wendt falsely claimed, in January 2016, that EarthSource had generated $200,000 per month from gold mining, when EarthSource's total annual gold production in 2015 was less than $100,000. The complaint also alleges that Palermo, in offering investments through Premier, promised investors quarterly profits of 20%, and falsely claimed investors' funds would be used to purchase diamonds in Liberia for export and resale in Florida. According to the complaint, Palermo also induced purchases in a joint venture by falsely claiming that EarthSource had obtained financing that would allow mining production to commence at one of its sites when in fact no such financing existed. The complaint further alleges that Palermo misappropriated over $340,000 - most of the Premier investors' funds - and used it for personal expenses and to make Ponzi-like payments to prior investors. The SEC's complaint, filed in federal court in Rochester, New York, charges Wendt, Costabile, EarthSource, Abundant, Palermo, and Premier with violating the antifraud provisions of 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 defendants have agreed to settle the charges against them and, without admitting or denying the allegations of the complaint, have consented to judgments enjoining them from violating the charged provisions, ordering Palermo to pay disgorgement of his allegedly ill-gotten gains of $340,005 plus prejudgment interest and a civil penalty of $125,000, and ordering Wendt and Costabile to pay civil penalties of $100,000 each. The settlements are subject to court approval. The SEC's investigation was conducted by Patricia A. Kuzma Trujillo and Jacquelyn D. King with the assistance of Julia C. Green, and was supervised by Kingdon Kase, Scott A. Thompson, and Kelly L. Gibson in the Philadelphia Regional Office. The litigation will be led by Ms. Green and supervised by Jennifer Chun Barry. SEC Complaint
OCR text (3,450c · html-text · 99% conf)
SEC Charges Mining Company Founders and Executive with Fraud Litigation Release No. 25040 / March 2, 2021 Securities and Exchange Commission v. EarthSource Minerals International, LLC et al., No. 6:21-cv-06198 (W.D.N.Y. filed March 1, 2021) The Securities and Exchange Commission charged New York residents Jason M. Wendt and Armando Costabile with the fraudulent offer and sale of at least $4.7 million of securities to approximately 234 investors through their companies, EarthSource Minerals International, LLC and Abundant Resource Development, LLLP between September 2014 and December 2019. The SEC also charged Florida resident Michael J. Palermo, EarthSource's Chief Investment Officer, with the fraudulent offer and sale of an additional $501,906 of securities to 22 investors through Palermo's company, Premier Minerals International, LLC, and the misappropriation of the majority of the investors' money raised. According to the SEC's complaint, Wendt and Costabile falsely claimed EarthSource could pay investors returns of 10% per month by engaging in "diamond flipping" - purchasing diamonds in Liberia and exporting them for resale in the United States at significantly higher prices. As alleged, contrary to their representations, EarthSource actually lost money on the diamond flipping transactions, and Wendt and Costabile siphoned money from the program to pay for EarthSource's unsuccessful mining operations. The complaint alleges that Wendt falsely claimed, in January 2016, that EarthSource had generated $200,000 per month from gold mining, when EarthSource's total annual gold production in 2015 was less than $100,000. The complaint also alleges that Palermo, in offering investments through Premier, promised investors quarterly profits of 20%, and falsely claimed investors' funds would be used to purchase diamonds in Liberia for export and resale in Florida. According to the complaint, Palermo also induced purchases in a joint venture by falsely claiming that EarthSource had obtained financing that would allow mining production to commence at one of its sites when in fact no such financing existed. The complaint further alleges that Palermo misappropriated over $340,000 - most of the Premier investors' funds - and used it for personal expenses and to make Ponzi-like payments to prior investors. The SEC's complaint, filed in federal court in Rochester, New York, charges Wendt, Costabile, EarthSource, Abundant, Palermo, and Premier with violating the antifraud provisions of 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 defendants have agreed to settle the charges against them and, without admitting or denying the allegations of the complaint, have consented to judgments enjoining them from violating the charged provisions, ordering Palermo to pay disgorgement of his allegedly ill-gotten gains of $340,005 plus prejudgment interest and a civil penalty of $125,000, and ordering Wendt and Costabile to pay civil penalties of $100,000 each. The settlements are subject to court approval. The SEC's investigation was conducted by Patricia A. Kuzma Trujillo and Jacquelyn D. King with the assistance of Julia C. Green, and was supervised by Kingdon Kase, Scott A. Thompson, and Kelly L. Gibson in the Philadelphia Regional Office. The litigation will be led by Ms. Green and supervised by Jennifer Chun Barry. SEC Complaint