SEC v. AJN INVESTMENTS, LLC; and Jason Adam Ogden, No. 0:16-cv-63036, Southern District of Florida (Dec. 28, 2016) — Complaint

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA

SECURITIES AND EXCHANGE COMMISSION,

Plaintiff,
 C.A. No. 0:16-cv-63036
v.

AJN INVESTMENTS, LLC and
JASON ADAM OGDEN,

Defendants.

COMPLAINT

 For its Complaint against Defendants AJN Investments, LLC (“AJN”) and Jason Adam
Ogden, Plaintiff Securities and Exchange Commission (“SEC” or the “Commission”) alleges as
follows:
SUMMARY
1. Between October 2011 and April 2015, AJN and its then CEO Jason Adam
Ogden raised approximately $6.7 million from 14 foreign investors through the AJN EB-5
investment offering.  The EB-5 immigrant investor program provides a path to permanent
residency for foreign investors who invest in a commercial enterprise that creates at least 10 jobs
for American workers through either direct employment (e.g. store employees) or indirect job
stimulation (e.g. store construction).
2. AJN was formed for the purpose of using EB-5 investor money to own and
operate stores franchised from two other business controlled by Ogden: Juiceblendz
International, Inc. (“Juiceblendz”) and Yoblendz International, LLC (“Yoblendz”).  In return for

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their financial contribution, the investors were told that their money would be used to build and
operate Juiceblendz and Yoblendz stores that would generate a 5% preferred return and other
cash distributions as well as create jobs which, according to an economic impact analysis report
attached to the offering materials, were expected to be sufficient to qualify for an EB-5 visa and
ultimately a green card.
3. Instead, Ogden used investor funds for various undisclosed purposes, including
funding lawsuit settlements and loans unrelated to AJN, paying management fees to Seekem,
Inc. (the Ogden-controlled managing member of AJN), and funding AJN payroll and other
operating expenses.  Ogden also changed AJN’s business plan mid-stream to focus on building
less costly, less profitable kiosks, but continued to solicit investors with the stale offering
materials and, later, a revised economic impact analysis based on untrue cost and revenue
assumptions.  By failing to use investor funds for construction costs as contemplated by the
offering materials and by failing to meet the unrealistic revenue projections underlying the
economic impact analyses, Ogden jeopardized AJN investors’ ability to create the necessary jobs
to obtain a green card under the EB-5 program.
4. In August 2016, to resolve a private arbitration, Ogden ceased operating AJN,
Yoblendz and Juiceblendz and transferred all of his shares in those entities (held by Blendz
Holding, LLC) to a third party who had no role in the conduct alleged herein, and who has
assumed control of the businesses and replaced Seekem as its managing member.  Ogden has no
ongoing control over the entities and has given up any interests in, or claims against, the entities
and investors.
5. By committing the acts alleged in this Complaint, Defendants Ogden and AJN
directly and indirectly engaged in, and unless restrained and enjoined by the Court will continue

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to engage in, acts, transactions, practices, and courses of business that violate securities-
registration and anti-fraud provisions of the federal securities laws, specifically Sections 5(a),
5(c), and 17(a) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77e(a), 77e(c), and
77q(a)] and Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. §
78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].
6. The SEC brings this action seeking permanent injunctions as to each Defendant,
disgorgement plus prejudgment interest and a civil penalty as to Defendant Ogden, and all other
equitable and ancillary relief to which the Court determines the SEC is entitled.
JURISDICTION AND VENUE
7. The SEC brings this action under Securities Act Section 20(b) [15 U.S.C. §77t(b)]
and Exchange Act Section 21(d) [15 U.S.C. §78u(d)], seeking to restrain and enjoin the
Defendants permanently from engaging in such acts and practices as alleged herein.
8. The Court has jurisdiction over this action under Section 20(d) and 22(a) of the
Securities Act [15 U.S.C. §§ 77t(d) and 77v(a)] and Sections 21(d), 21(e), and 27 of the
Exchange Act [15 U.S.C. §§ 78u(d), 78u(e), and 78aa].
9. Each of the limited liability company membership interests offered and sold as
described in this complaint is a “security” as that term is defined under Securities Act Section
2(a)(1) [15 U.S. C. § 77b(a)(1)] and Exchange Act Section 3(a)(10) [5 U.S. C. § 78c(a)(10)].
10. The Defendants, directly and indirectly, made use of the mails or of the means
and instrumentalities of interstate commerce in connection with the transactions, acts, practices,
and courses of business described in this complaint.
11. Venue is proper because Defendants reside in, and a substantial part of the events,
acts, and omissions giving rise to the claims occurred in, the Southern District of Florida.

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PARTIES
12. Plaintiff SEC is an agency of the United States government charged with
regulating the country’s securities industry and prosecuting civil and administrative cases to
enforce the country’s securities laws.
13. Defendant AJN is a limited liability company organized under Florida law.
During all times relevant to the conduct alleged herein, AJN was headquartered in Weston,
Broward County, Florida, and as of August 2016 it is headquartered in Sugarland, Texas.
14. Defendant Ogden is a natural person residing in Southwest Ranches, Broward
County, Florida.
STATEMENT OF FACTS
I. The EB-5 Program
15. The EB-5 Immigrant Investor Pilot Program was created by Congress in 1990 to
stimulate the U.S. economy through job creation and capital investment by foreign investors.
Under the program, which is administered by the U.S. Citizenship & Immigration Service
(“USCIS”), foreign nationals are eligible to petition USCIS for a green card when they can show
they have 1) invested $500,000 in a high unemployment or rural area (or $1 million in any area),
2) in a commercial enterprise, 3) that carries a risk of loss, and 4) creates at least 10 full-time
jobs for U.S. workers.  Job creation can be met through “direct jobs”, such as jobs for employees
who work directly for the business created by the investment, or “indirect jobs”, which are jobs
typically created by businesses that supply services or goods to the EB-5 business, such as
construction services.  From the investor’s perspective, in addition to the potential financial
return, one of the most important aspects of an EB-5 investment is typically the ability for the
investor to obtain a green card.

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16. After making the $500,000 investment, the foreign investor petitions USCIS for a
conditional green card, which is valid for two years.  The investor submits an EB-5 economic
report as part of his initial green card application that outlines how many jobs the investment is
projected to create and whether those jobs are direct or indirect.  Indirect jobs are estimated using
a USCIS approved economic methodology, such as the RIMS II methodology created by the
Bureau of Economic Analysis.  To estimate the number of jobs created, the RIMS II
methodology takes 1) projected costs, such as construction costs for stores, associated with the
investment and/or projected revenues resulting from the investment, and 2) applies an
employment multiplier that takes into account the proposed project’s location and industry.
17. At the end of the two year conditional period, the EB-5 investor requests that
USCIS issue a permanent green card.  In determining whether to grant the request for a
permanent green card, USCIS considers, among other things, whether the actual project costs
and/or revenues resulting from the EB-5 investment were sufficient to create the required 10
jobs.
II. The AJN Offering
18. In AJN’s Confidential Private Placement Memorandum (“PPM”), AJN and
Ogden told investors that in exchange for the $550,000 subscription price, each investor would
receive one unit of limited liability company membership interest in AJN, a 5% annual return on
investment, and distributions of cash available from a specific Juiceblendz smoothie or Yoblendz
frozen yogurt franchise store.  The PPM also stated that each investor would have the right to
consult with the managing member regarding the location of their store, and the managing
member would be responsible for maintaining separate books of account for each store in order
to track that store’s financial performance.

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19. Pursuant to the terms of the PPM, Seekem, as managing member of AJN, was
entitled to receive a one-time $50,000 administrative fee per investor, a 50% membership
interest in AJN, and an annual management fee.
20. The units of limited liability company membership interests offered by AJN are
investment contracts and thus securities as defined by section 2(a)(1) of the Securities Act and
Section 3(a)(10) of the Exchange Act because the AJN investors invested money in a common
enterprise with the expectation of profits derived solely from the efforts of Defendants.
21. The AJN EB-5 offering was not registered with the Commission and no
registration exemption was applicable.
22. Potential investors were identified through a number of avenues, including
conferences and road shows, networking with immigration attorneys and brokers (who posted
AJN-approved marketing materials on the internet), and subscribing to a website designed to
match EB-5 offerings and investors.  While all investors were asked to sign the subscription
agreement outside the country, several investors came to Florida for a visit and sales meeting and
Ogden knew that at least two investors were living in the United States before they became AJN
investors.  The AJN investments were not finalized until the investment documents and funds
were received by AJN in the United States.
23. Although the managing member reserved the right to reallocate funds to the
extent “reasonably necessary,” the PPM summarized the overall projected use of proceeds as
follows:

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Recipient of Funds Amount Purpose
Seekem $50,000
Administrative fee intended to covers initial expenses
associated with the creation of AJN and legal and
promotional fees.
AJN $75,000 Working capital
 $25,000 Reserve management services fee paid to Seekem
Juiceblendz $400,000
Store construction fee to cover store construction,
equipping and opening expenses.

24. The allocation of $400,000 to store construction was of particular importance for
two reasons.  First, under the RIMS II methodology, the basis for estimating how many jobs a
project will create is the amount of the projected construction cost, along with projected
revenues.  The representation to USCIS that at least 10 jobs per investor would be created by the
AJN investment was based on the $400,000 allocation.   Second, the $400,000 is the largest
component (80 percent) of the $500,000 required to be invested to qualify for the EB-5 program.
The construction cost estimate in the PPM was purportedly based on Ogden’s experience
opening in-line franchise stores and was not tied to meeting the $500,000 EB-5 requirement.
The Franchise Disclosure Documents attached to the PPM, however, indicate that at that time the
estimated opening costs were between $94,750 and $293,000 for a Juiceblendz franchise store
and between $109,550 and $448,000 for a Yoblendz franchise store, and Ogden had never
opened a store that cost $400,000 or more to build.
25. The PPM also included a 32-page AJN five-year financial projection model,
including a five-year profit and loss statement for AJN, and financial projections for a single
Yoblendz and Juiceblendz store, which showed projected revenues after the second year of
$819,000 for Yoblendz and $506,000 for Juiceblendz.  Like the construction cost, a store’s
revenue is a critical component of the RIMS II methodology used to calculate job creation and

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essential to determining whether the foreign investor has met the threshold of creating 10 jobs
for permanent residency under the EB-5 program after two years.
26. Finally, the PPM included a 47-page report that evaluated the economic impact of
developing and operating Yoblendz and Juiceblendz stores in certain counties of Florida.  The
report used the RIMS II methodology to estimate the number of indirect jobs created per store.
Using an average construction cost per store of $400,000 (the exact dollar amount estimated for
store construction per the PPM) and average store revenues of $785,000 (a number in the range
of estimated revenues for a Yoblendz or Juiceblendz store), the report concluded that just over 24
jobs would be created from the construction and operation of each store.  Thus, according to the
report attached to the offering materials, the AJN EB-5 investor should have easily exceeded the
required minimum of 10 jobs created.
III. Business Model Changes From Stores to Smaller, Less Costly, Less
Profitable Kiosk Franchises

27. Ogden accepted AJN’s first foreign investment in October 2011 and continued to
solicit investments through at least April 2015.  By late 2013, AJN’s business model changed,
apparently due to a downturn in the frozen yogurt market.  Instead of constructing Juiceblendz
and Yoblendz stores in strip malls, Ogden sought to focus on sports arena and university campus
markets, which required smaller kiosk-type stores.
28. Kiosks were significantly cheaper to build than stores.  Despite knowing that the
actual construction costs were significantly less, Ogden kept paying Juiceblendz the full
$400,000 construction services fee.
29. Due to the limited hours of operation, seasonality, and restricted customer access,
the arena and university kiosks were also projected to produce less revenue than a traditional
store.

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30. Despite the change in business model, Ogden never updated the PPM.  Therefore,
four investors who invested in 2014 and 2015 did so based on the original PPM, containing stale
cost and revenue projections.
31. While the PPM was never updated, the economic report was updated in April
2015, purportedly to reflect the change in business model from stores to kiosks.  AJN provided
the updated report to at least two investors.  However, the updated report misrepresented the
construction cost and profit projections for kiosks, and as such misrepresented AJN’s ability to
create the requisite number of jobs for an EB-5 visa.  First, with respect to construction costs, the
updated report assumed that average construction cost for a kiosk is $400,000 – the same number
estimated in the original economic report and the PPM, and a number unsupported by the new
business model.  Second, the updated report assumed average revenues, purportedly based on
actual 2014 kiosk revenues, of $221,943 per kiosk.  For stores, the updated report assumed that
store revenues were twice that as kiosks, or $443,886.  In fact, the maximum 2014 revenue for
any AJN store or kiosk was $146,916, and average 2014 revenue for all stores and kiosks was
$73,407, well below the numbers stated in the updated report.  As a result of these revised
assumptions, the economic report reduced the projected jobs created per store from 24 to 15.
Had the real construction costs and revenue projections been used, the job creation projection
would have been even lower, likely below the EB-5 program’s 10 job threshold.
32. In addition to switching from stores to kiosks, the business circumstances changed
in other ways that impacted the amount of investors’ capital that was being used to create jobs.
For example, in at least one location, a university was so eager to attract business to campus that
it paid for the majority of the build-out itself.  In two other instances, instead of building new
locations for the investors, AJN assigned two existing corporate-owned stores to new AJN

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investors, reclassified the expenses on the books, and spent just a few thousand dollars on
renovations.
IV. Defendants’ Misstatements
33. Ogden, individually and through AJN, made material misstatements that led
investors to believe investing in AJN would be financially beneficial and afford them an
opportunity to receive EB-5 visas.
34. All investors relied on false statements in the PPM that the majority of investor
funds would be used by Juiceblendz to construct job-creating franchise stores as outlined in the
offering documents, not to settle unrelated loans and lawsuits or to pay for management fees and
operating expenses.
35. Investors who joined AJN after the business model changed and were given an
outdated PPM and economic impact report were also misled by stale information related to the
construction costs and financial projection estimates for the store type assigned to them (i.e., a
kiosk).
36. The last two investors, who received a revised economic impact report, were
misled by the highly inflated construction costs and revenue estimates that had no relation to the
known facts at the time.
37. The misstatements regarding the use of funds and projected costs and revenues
were material.  The misstatements had a direct impact on the investors’ ability to evaluate
whether or not their investments would be financially beneficial or would ultimately qualify for a
green card, which is material to the typical EB-5 investor.
38. Defendants knew or were severely reckless in not knowing that the PPM
statements regarding use of funds were untrue at the outset, that the business model changed over

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time resulting in a stale PPM, and that the revised economic report contained false assumptions.
V. Defendants Misappropriated Investor Funds
39. Starting immediately after the first investor joined AJN in October 2011 and
continuing through at least July 2015, Ogden misappropriated investor funds by using them for
purposes other than those disclosed in the PPM.  Ogden’s actions were not “reasonably
necessary” reallocations as contemplated by the PPM.  Rather, Ogden completely removed
money from the AJN project and used it for unrelated expenses to the detriment of both the
investors’ financial position and EB-5 visa eligibility.  Ogden’s control over all involved entities
– AJN, Seekem, Juiceblendz, and Yoblendz – allowed him to move investor money around as he
saw fit without question.
40. Ogden used at least $2 million of the AJN investor funds or funds comingled with
investor funds to pay lawsuit expenses, lawsuit settlements, and loans, all of which were
unrelated to AJN.  The lawsuit expenses and lawsuit settlements were mostly related to disputes
between Ogden’s other companies (Juiceblendz or Yoblendz) and disgruntled franchisees.
41. Ogden also used investor funds to pay for management fees purportedly owed to
Seekem, an entity that he also owned.  Under the terms of the investment, Seekem was entitled to
an annual management fee equal to the greater of five percent of (1) each store’s gross volume of
business or (2) each member’s capital contribution.  According to the PPM’s use of funds chart,
$25,000 of the initial investment should have been reserved in anticipation of payment of these
management fees.  However, Ogden never directed AJN to reserve for these management fees;
rather, Ogden spent the money on the unrelated lawsuit expenses and loans described above.  To
pay Seekem’s outstanding management fees, Ogden misappropriated Investor 11’s funds by
causing AJN to transfer only $152,000 (instead of the usual $400,000) of Investor 11’s $550,000

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investment to Juiceblendz for construction fees.  Unbeknownst to Investor 11, the remainder was
retained at AJN to pay Seekem.  Most importantly, those funds were not invested in a job
creating enterprise on behalf of Investor 11 as stated in the PPM and as required under the EB-5
program.
42. Finally, in order to fund operating expenses for AJN (including payroll), Ogden
transferred money from Juiceblendz accounts, which contained investors’ construction cost fees,
back to AJN, such that those funds were no longer invested in a job creating enterprise.
43. In addition to misappropriating investor funds to cover unrelated or undisclosed
business expenses and liabilities, Ogden used at least $1,008,681 of the investors’ funds for his
own personal benefit, including for undisclosed cash compensation, meals and entertainment,
and to repay a personal loan.
44. Overall, even though Ogden transferred $4.5 million from AJN to Juiceblendz for
purported construction costs, only $1.25 million was spent on store construction (or just over
$700,000 excluding the reclassified expenses described in paragraph 32).  Moreover, at least six
of the investors who invested in 2012 and 2013, prior to the change in business model from store
to kiosk, still did not have either a store or a kiosk as of late 2015, and there was no money left
for kiosk construction build-outs because Ogden had already used it for the various non-AJN
purposes described above.  Moreover, it is highly unlikely such kiosks would meet the EB-5
requirements for job creation.
45. By misappropriating money the investors believed was being used for store
construction to pay for unrelated lawsuits and loans, management fees, and operational expenses,
Ogden, individually and through AJN, knowingly employed a scheme to defraud investors.

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46. The misappropriation of funds is material to investors because, among other
reasons, it has been so extensive that Ogden and AJN have not had sufficient funds to complete
construction of the stores contemplated in the offering materials.
FIRST CLAIM FOR RELIEF
Violations of Exchange Act Section 10(b) and Exchange Act Rule 10b-5

47. Plaintiff SEC re-alleges and incorporates paragraphs 1 through 46 of this
Complaint by reference as if set forth verbatim in this Claim.
48. Defendants Ogden and AJN directly or indirectly, singly or in concert with others,
in connection with the purchase and sale of securities, by use of the means and instrumentalities
of interstate commerce or by use of the mails, have (a) employed devices, schemes, and artifices
to defraud; (b) made untrue statements of material facts and have omitted to state material facts
necessary in order to make the statements made, in light of the circumstances under which they
were made, not misleading; and (c) engaged in acts, practices, and courses of business which
operated as a fraud and deceit upon purchasers, prospective purchasers, and other persons.
49. Defendants Ogden and AJN engaged in the above-referenced conduct and made
the above-referenced untrue and misleading statements knowingly or with severe recklessness.
50. By reason of the foregoing, Defendants Ogden and AJN have violated, and unless
enjoined will continue to violate, Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and
Rule 10b-5 [17 C.F.R. § 240.10b-5] thereunder.
SECOND CLAIM FOR RELIEF
Violations of Securities Act Section 17(a)

51. Plaintiff SEC re-alleges and incorporates paragraphs 1 through 46 of this
Complaint by reference as if set forth verbatim in this Claim.

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52. By engaging in the acts and conduct alleged herein, Defendants Ogden and AJN
directly or indirectly, singly or in concert with others, in the offer and sale of securities, by use of
the means and instruments of transportation and communication in interstate commerce or by use
of the mails, have (a) employed devices, schemes, or artifices to defraud; (b) obtained money or
property by means of untrue statements of material fact or omissions to state material facts
necessary in order to make the statements made, in light of the circumstances under which they
were made, not misleading; and (c) engaged in transactions, practices, or courses of business
which operated or would operate as a fraud or deceit.
53. With respect to violations of Securities Act Sections 17(a)(2) and (3), Defendants
Ogden and AJN were at least negligent in their conduct and in the untrue and misleading
statements alleged herein.  With respect to violations of Securities Act Section 17(a)(1),
Defendants Ogden and AJN engaged in the referenced conduct and made the referenced untrue
and misleading statements knowingly or with severe recklessness.
54. By reason of the foregoing, Defendants Ogden and AJN have violated and, unless
enjoined, will continue to violate Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)].
THIRD CLAIM
Violations of Securities Act Sections 5(a) and 5(c)

55. Plaintiff SEC re-alleges and incorporates paragraphs 1 through 46 of this
Complaint by reference as if set forth verbatim in this Claim.
56. Defendants Ogden and AJN, directly or indirectly, singly or in concert with
others, have offered to sell, sold, and delivered after sale, certain securities and have (a) made
use of the means and instruments of transportation and communication in interstate commerce
and of the mails to sell securities, through the use of email, interstate carrier, brokerage
transactions, or otherwise; (b) carried and caused to be carried through the mails and in interstate

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commerce by the means and instruments of transportation such securities for the purpose of sale
and for delivery after sale; and (c) made use of the means or instruments of transportation and
communication in interstate commerce or of the mails to offer to sell such securities.
57. By reason of the foregoing, Defendants Ogden and AJN have violated, and unless
enjoined will continue to violate, Sections 5(a) and 5(c) of the Securities Act [15 U.S.C. §§
77e(a) and 77e (c)].
PRAYER FOR RELIEF

WHEREFORE, the SEC respectfully requests that the Court enter a judgment:
I.
Permanently enjoining Defendants Ogden and AJN from future violations of Sections
5(a), 5(c), and 17(a) of the Securities Act [15 U.S.C. §§ 77e(a), 77e(c), and 77q(a)], and 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].
          II.

Permanently enjoining Defendant Ogden from directly or indirectly, including but not
limited to through any entity owned by or controlled by Defendant Ogden, soliciting or accepting
funds from any person or entity for any unregistered offering of securities;
III.
Ordering Defendant Ogden to disgorge ill-gotten gains from the conduct alleged herein
plus prejudgment interest thereon;

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IV.
 Imposing a civil penalty against Defendant Ogden 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)] for violations of the federal securities laws as alleged herein; and
V.
 Imposing such other and further relief as the SEC may show itself entitled.

Dated:   December 28, 2016  Respectfully submitted,

s/Timothy L. Evans_____________________
Timothy L. Evans ( Texas Bar No. 24065211)
SD Florida Bar No. A5502267
[email protected]

United States Securities and Exchange Commission
Fort Worth Regional Office
801 Cherry Street, Suite 1900
Fort Worth, Texas 76102
Telephone: (817) 978-5036
Facsimile: (817) 978-4927

Attorney for Plaintiff U.S. Securities and Exchange
Commission

UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF FLORIDA 

 
 
  
SECURITIES AND EXCHANGE COMMISSION,  
  

Plaintiff,  
 C.A. No. 0:16-cv-63036 

v.  
  
AJN INVESTMENTS, LLC and 
JASON ADAM OGDEN, 

 

  
Defendants.  

  
 
 

COMPLAINT 
 

 For its Complaint against Defendants AJN Investments, LLC (“AJN”) and Jason Adam 

Ogden, Plaintiff Securities and Exchange Commission (“SEC” or the “Commission”) alleges as 

follows: 

SUMMARY 

1. Between October 2011 and April 2015, AJN and its then CEO Jason Adam 

Ogden raised approximately $6.7 million from 14 foreign investors through the AJN EB-5 

investment offering.  The EB-5 immigrant investor program provides a path to permanent 

residency for foreign investors who invest in a commercial enterprise that creates at least 10 jobs 

for American workers through either direct employment (e.g. store employees) or indirect job 

stimulation (e.g. store construction).   

2. AJN was formed for the purpose of using EB-5 investor money to own and 

operate stores franchised from two other business controlled by Ogden: Juiceblendz 

International, Inc. (“Juiceblendz”) and Yoblendz International, LLC (“Yoblendz”).  In return for 

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their financial contribution, the investors were told that their money would be used to build and 

operate Juiceblendz and Yoblendz stores that would generate a 5% preferred return and other 

cash distributions as well as create jobs which, according to an economic impact analysis report 

attached to the offering materials, were expected to be sufficient to qualify for an EB-5 visa and 

ultimately a green card.     

3. Instead, Ogden used investor funds for various undisclosed purposes, including 

funding lawsuit settlements and loans unrelated to AJN, paying management fees to Seekem, 

Inc. (the Ogden-controlled managing member of AJN), and funding AJN payroll and other 

operating expenses.  Ogden also changed AJN’s business plan mid-stream to focus on building 

less costly, less profitable kiosks, but continued to solicit investors with the stale offering 

materials and, later, a revised economic impact analysis based on untrue cost and revenue 

assumptions.  By failing to use investor funds for construction costs as contemplated by the 

offering materials and by failing to meet the unrealistic revenue projections underlying the 

economic impact analyses, Ogden jeopardized AJN investors’ ability to create the necessary jobs 

to obtain a green card under the EB-5 program.   

4. In August 2016, to resolve a private arbitration, Ogden ceased operating AJN, 

Yoblendz and Juiceblendz and transferred all of his shares in those entities (held by Blendz 

Holding, LLC) to a third party who had no role in the conduct alleged herein, and who has 

assumed control of the businesses and replaced Seekem as its managing member.  Ogden has no 

ongoing control over the entities and has given up any interests in, or claims against, the entities 

and investors. 

5. By committing the acts alleged in this Complaint, Defendants Ogden and AJN 

directly and indirectly engaged in, and unless restrained and enjoined by the Court will continue 

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COMPLAINT   PAGE 3 OF 16 
SEC V. AJN INVESTMENTS, LLC, ET AL. 
 

to engage in, acts, transactions, practices, and courses of business that violate securities-

registration and anti-fraud provisions of the federal securities laws, specifically Sections 5(a), 

5(c), and 17(a) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77e(a), 77e(c), and 

77q(a)] and Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 

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

6. The SEC brings this action seeking permanent injunctions as to each Defendant, 

disgorgement plus prejudgment interest and a civil penalty as to Defendant Ogden, and all other 

equitable and ancillary relief to which the Court determines the SEC is entitled. 

JURISDICTION AND VENUE 

7. The SEC brings this action under Securities Act Section 20(b) [15 U.S.C. §77t(b)] 

and Exchange Act Section 21(d) [15 U.S.C. §78u(d)], seeking to restrain and enjoin the 

Defendants permanently from engaging in such acts and practices as alleged herein. 

8. The Court has jurisdiction over this action under Section 20(d) and 22(a) of the 

Securities Act [15 U.S.C. §§ 77t(d) and 77v(a)] and Sections 21(d), 21(e), and 27 of the 

Exchange Act [15 U.S.C. §§ 78u(d), 78u(e), and 78aa].     

9. Each of the limited liability company membership interests offered and sold as 

described in this complaint is a “security” as that term is defined under Securities Act Section 

2(a)(1) [15 U.S. C. § 77b(a)(1)] and Exchange Act Section 3(a)(10) [5 U.S. C. § 78c(a)(10)].   

10. The Defendants, directly and indirectly, made use of the mails or of the means 

and instrumentalities of interstate commerce in connection with the transactions, acts, practices, 

and courses of business described in this complaint. 

11. Venue is proper because Defendants reside in, and a substantial part of the events, 

acts, and omissions giving rise to the claims occurred in, the Southern District of Florida. 

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COMPLAINT   PAGE 4 OF 16 
SEC V. AJN INVESTMENTS, LLC, ET AL. 
 

PARTIES 

12. Plaintiff SEC is an agency of the United States government charged with 

regulating the country’s securities industry and prosecuting civil and administrative cases to 

enforce the country’s securities laws.  

13. Defendant AJN is a limited liability company organized under Florida law.  

During all times relevant to the conduct alleged herein, AJN was headquartered in Weston, 

Broward County, Florida, and as of August 2016 it is headquartered in Sugarland, Texas.     

14. Defendant Ogden is a natural person residing in Southwest Ranches, Broward 

County, Florida.   

STATEMENT OF FACTS 

I. The EB-5 Program 

15. The EB-5 Immigrant Investor Pilot Program was created by Congress in 1990 to 

stimulate the U.S. economy through job creation and capital investment by foreign investors.  

Under the program, which is administered by the U.S. Citizenship & Immigration Service 

(“USCIS”), foreign nationals are eligible to petition USCIS for a green card when they can show 

they have 1) invested $500,000 in a high unemployment or rural area (or $1 million in any area), 

2) in a commercial enterprise, 3) that carries a risk of loss, and 4) creates at least 10 full-time 

jobs for U.S. workers.  Job creation can be met through “direct jobs”, such as jobs for employees 

who work directly for the business created by the investment, or “indirect jobs”, which are jobs 

typically created by businesses that supply services or goods to the EB-5 business, such as 

construction services.  From the investor’s perspective, in addition to the potential financial 

return, one of the most important aspects of an EB-5 investment is typically the ability for the 

investor to obtain a green card.   

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COMPLAINT   PAGE 5 OF 16 
SEC V. AJN INVESTMENTS, LLC, ET AL. 
 

16. After making the $500,000 investment, the foreign investor petitions USCIS for a 

conditional green card, which is valid for two years.  The investor submits an EB-5 economic 

report as part of his initial green card application that outlines how many jobs the investment is 

projected to create and whether those jobs are direct or indirect.  Indirect jobs are estimated using 

a USCIS approved economic methodology, such as the RIMS II methodology created by the 

Bureau of Economic Analysis.  To estimate the number of jobs created, the RIMS II 

methodology takes 1) projected costs, such as construction costs for stores, associated with the 

investment and/or projected revenues resulting from the investment, and 2) applies an 

employment multiplier that takes into account the proposed project’s location and industry. 

17. At the end of the two year conditional period, the EB-5 investor requests that 

USCIS issue a permanent green card.  In determining whether to grant the request for a 

permanent green card, USCIS considers, among other things, whether the actual project costs 

and/or revenues resulting from the EB-5 investment were sufficient to create the required 10 

jobs. 

II. The AJN Offering 

18. In AJN’s Confidential Private Placement Memorandum (“PPM”), AJN and 

Ogden told investors that in exchange for the $550,000 subscription price, each investor would 

receive one unit of limited liability company membership interest in AJN, a 5% annual return on 

investment, and distributions of cash available from a specific Juiceblendz smoothie or Yoblendz 

frozen yogurt franchise store.  The PPM also stated that each investor would have the right to 

consult with the managing member regarding the location of their store, and the managing 

member would be responsible for maintaining separate books of account for each store in order 

to track that store’s financial performance.   

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SEC V. AJN INVESTMENTS, LLC, ET AL. 
 

19. Pursuant to the terms of the PPM, Seekem, as managing member of AJN, was 

entitled to receive a one-time $50,000 administrative fee per investor, a 50% membership 

interest in AJN, and an annual management fee.    

20. The units of limited liability company membership interests offered by AJN are 

investment contracts and thus securities as defined by section 2(a)(1) of the Securities Act and 

Section 3(a)(10) of the Exchange Act because the AJN investors invested money in a common 

enterprise with the expectation of profits derived solely from the efforts of Defendants.   

21. The AJN EB-5 offering was not registered with the Commission and no 

registration exemption was applicable.     

22. Potential investors were identified through a number of avenues, including 

conferences and road shows, networking with immigration attorneys and brokers (who posted 

AJN-approved marketing materials on the internet), and subscribing to a website designed to 

match EB-5 offerings and investors.  While all investors were asked to sign the subscription 

agreement outside the country, several investors came to Florida for a visit and sales meeting and 

Ogden knew that at least two investors were living in the United States before they became AJN 

investors.  The AJN investments were not finalized until the investment documents and funds 

were received by AJN in the United States.       

23. Although the managing member reserved the right to reallocate funds to the 

extent “reasonably necessary,” the PPM summarized the overall projected use of proceeds as 

follows:   

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COMPLAINT   PAGE 7 OF 16 
SEC V. AJN INVESTMENTS, LLC, ET AL. 
 

Recipient of Funds Amount Purpose 

Seekem $50,000 Administrative fee intended to covers initial expenses 
associated with the creation of AJN and legal and 
promotional fees. 

AJN $75,000 Working capital 

 $25,000 Reserve management services fee paid to Seekem 

Juiceblendz $400,000 Store construction fee to cover store construction, 
equipping and opening expenses.   

 

24. The allocation of $400,000 to store construction was of particular importance for 

two reasons.  First, under the RIMS II methodology, the basis for estimating how many jobs a 

project will create is the amount of the projected construction cost, along with projected 

revenues.  The representation to USCIS that at least 10 jobs per investor would be created by the 

AJN investment was based on the $400,000 allocation.   Second, the $400,000 is the largest 

component (80 percent) of the $500,000 required to be invested to qualify for the EB-5 program.  

The construction cost estimate in the PPM was purportedly based on Ogden’s experience 

opening in-line franchise stores and was not tied to meeting the $500,000 EB-5 requirement.  

The Franchise Disclosure Documents attached to the PPM, however, indicate that at that time the 

estimated opening costs were between $94,750 and $293,000 for a Juiceblendz franchise store 

and between $109,550 and $448,000 for a Yoblendz franchise store, and Ogden had never 

opened a store that cost $400,000 or more to build.  

25. The PPM also included a 32-page AJN five-year financial projection model, 

including a five-year profit and loss statement for AJN, and financial projections for a single 

Yoblendz and Juiceblendz store, which showed projected revenues after the second year of 

$819,000 for Yoblendz and $506,000 for Juiceblendz.  Like the construction cost, a store’s 

revenue is a critical component of the RIMS II methodology used to calculate job creation and 

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COMPLAINT   PAGE 8 OF 16 
SEC V. AJN INVESTMENTS, LLC, ET AL. 
 

essential to determining whether the foreign investor has met the threshold of creating 10 jobs 

for permanent residency under the EB-5 program after two years.   

26. Finally, the PPM included a 47-page report that evaluated the economic impact of 

developing and operating Yoblendz and Juiceblendz stores in certain counties of Florida.  The 

report used the RIMS II methodology to estimate the number of indirect jobs created per store.  

Using an average construction cost per store of $400,000 (the exact dollar amount estimated for 

store construction per the PPM) and average store revenues of $785,000 (a number in the range 

of estimated revenues for a Yoblendz or Juiceblendz store), the report concluded that just over 24 

jobs would be created from the construction and operation of each store.  Thus, according to the 

report attached to the offering materials, the AJN EB-5 investor should have easily exceeded the 

required minimum of 10 jobs created.  

III. Business Model Changes From Stores to Smaller, Less Costly, Less 
Profitable Kiosk Franchises 
 

27. Ogden accepted AJN’s first foreign investment in October 2011 and continued to 

solicit investments through at least April 2015.  By late 2013, AJN’s business model changed, 

apparently due to a downturn in the frozen yogurt market.  Instead of constructing Juiceblendz 

and Yoblendz stores in strip malls, Ogden sought to focus on sports arena and university campus 

markets, which required smaller kiosk-type stores.   

28. Kiosks were significantly cheaper to build than stores.  Despite knowing that the 

actual construction costs were significantly less, Ogden kept paying Juiceblendz the full 

$400,000 construction services fee.  

29. Due to the limited hours of operation, seasonality, and restricted customer access, 

the arena and university kiosks were also projected to produce less revenue than a traditional 

store. 

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COMPLAINT   PAGE 9 OF 16 
SEC V. AJN INVESTMENTS, LLC, ET AL. 
 

30. Despite the change in business model, Ogden never updated the PPM.  Therefore, 

four investors who invested in 2014 and 2015 did so based on the original PPM, containing stale 

cost and revenue projections. 

31. While the PPM was never updated, the economic report was updated in April 

2015, purportedly to reflect the change in business model from stores to kiosks.  AJN provided 

the updated report to at least two investors.  However, the updated report misrepresented the 

construction cost and profit projections for kiosks, and as such misrepresented AJN’s ability to 

create the requisite number of jobs for an EB-5 visa.  First, with respect to construction costs, the 

updated report assumed that average construction cost for a kiosk is $400,000 – the same number 

estimated in the original economic report and the PPM, and a number unsupported by the new 

business model.  Second, the updated report assumed average revenues, purportedly based on 

actual 2014 kiosk revenues, of $221,943 per kiosk.  For stores, the updated report assumed that 

store revenues were twice that as kiosks, or $443,886.  In fact, the maximum 2014 revenue for 

any AJN store or kiosk was $146,916, and average 2014 revenue for all stores and kiosks was 

$73,407, well below the numbers stated in the updated report.  As a result of these revised 

assumptions, the economic report reduced the projected jobs created per store from 24 to 15.  

Had the real construction costs and revenue projections been used, the job creation projection 

would have been even lower, likely below the EB-5 program’s 10 job threshold.                     

32. In addition to switching from stores to kiosks, the business circumstances changed 

in other ways that impacted the amount of investors’ capital that was being used to create jobs.  

For example, in at least one location, a university was so eager to attract business to campus that 

it paid for the majority of the build-out itself.  In two other instances, instead of building new 

locations for the investors, AJN assigned two existing corporate-owned stores to new AJN 

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COMPLAINT   PAGE 10 OF 16 
SEC V. AJN INVESTMENTS, LLC, ET AL. 
 

investors, reclassified the expenses on the books, and spent just a few thousand dollars on 

renovations.   

IV. Defendants’ Misstatements 

33. Ogden, individually and through AJN, made material misstatements that led 

investors to believe investing in AJN would be financially beneficial and afford them an 

opportunity to receive EB-5 visas.   

34. All investors relied on false statements in the PPM that the majority of investor 

funds would be used by Juiceblendz to construct job-creating franchise stores as outlined in the 

offering documents, not to settle unrelated loans and lawsuits or to pay for management fees and 

operating expenses.   

35. Investors who joined AJN after the business model changed and were given an 

outdated PPM and economic impact report were also misled by stale information related to the 

construction costs and financial projection estimates for the store type assigned to them (i.e., a 

kiosk).   

36. The last two investors, who received a revised economic impact report, were 

misled by the highly inflated construction costs and revenue estimates that had no relation to the 

known facts at the time.   

37. The misstatements regarding the use of funds and projected costs and revenues 

were material.  The misstatements had a direct impact on the investors’ ability to evaluate 

whether or not their investments would be financially beneficial or would ultimately qualify for a 

green card, which is material to the typical EB-5 investor.   

38. Defendants knew or were severely reckless in not knowing that the PPM 

statements regarding use of funds were untrue at the outset, that the business model changed over 

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COMPLAINT   PAGE 11 OF 16 
SEC V. AJN INVESTMENTS, LLC, ET AL. 
 

time resulting in a stale PPM, and that the revised economic report contained false assumptions.       

V. Defendants Misappropriated Investor Funds 

39. Starting immediately after the first investor joined AJN in October 2011 and 

continuing through at least July 2015, Ogden misappropriated investor funds by using them for 

purposes other than those disclosed in the PPM.  Ogden’s actions were not “reasonably 

necessary” reallocations as contemplated by the PPM.  Rather, Ogden completely removed 

money from the AJN project and used it for unrelated expenses to the detriment of both the 

investors’ financial position and EB-5 visa eligibility.  Ogden’s control over all involved entities 

– AJN, Seekem, Juiceblendz, and Yoblendz – allowed him to move investor money around as he 

saw fit without question. 

40. Ogden used at least $2 million of the AJN investor funds or funds comingled with 

investor funds to pay lawsuit expenses, lawsuit settlements, and loans, all of which were 

unrelated to AJN.  The lawsuit expenses and lawsuit settlements were mostly related to disputes 

between Ogden’s other companies (Juiceblendz or Yoblendz) and disgruntled franchisees.          

41. Ogden also used investor funds to pay for management fees purportedly owed to 

Seekem, an entity that he also owned.  Under the terms of the investment, Seekem was entitled to 

an annual management fee equal to the greater of five percent of (1) each store’s gross volume of 

business or (2) each member’s capital contribution.  According to the PPM’s use of funds chart, 

$25,000 of the initial investment should have been reserved in anticipation of payment of these 

management fees.  However, Ogden never directed AJN to reserve for these management fees; 

rather, Ogden spent the money on the unrelated lawsuit expenses and loans described above.  To 

pay Seekem’s outstanding management fees, Ogden misappropriated Investor 11’s funds by 

causing AJN to transfer only $152,000 (instead of the usual $400,000) of Investor 11’s $550,000 

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COMPLAINT   PAGE 12 OF 16 
SEC V. AJN INVESTMENTS, LLC, ET AL. 
 

investment to Juiceblendz for construction fees.  Unbeknownst to Investor 11, the remainder was 

retained at AJN to pay Seekem.  Most importantly, those funds were not invested in a job 

creating enterprise on behalf of Investor 11 as stated in the PPM and as required under the EB-5 

program.   

42. Finally, in order to fund operating expenses for AJN (including payroll), Ogden 

transferred money from Juiceblendz accounts, which contained investors’ construction cost fees, 

back to AJN, such that those funds were no longer invested in a job creating enterprise.     

43. In addition to misappropriating investor funds to cover unrelated or undisclosed 

business expenses and liabilities, Ogden used at least $1,008,681 of the investors’ funds for his 

own personal benefit, including for undisclosed cash compensation, meals and entertainment, 

and to repay a personal loan.     

44. Overall, even though Ogden transferred $4.5 million from AJN to Juiceblendz for 

purported construction costs, only $1.25 million was spent on store construction (or just over 

$700,000 excluding the reclassified expenses described in paragraph 32).  Moreover, at least six 

of the investors who invested in 2012 and 2013, prior to the change in business model from store 

to kiosk, still did not have either a store or a kiosk as of late 2015, and there was no money left 

for kiosk construction build-outs because Ogden had already used it for the various non-AJN 

purposes described above.  Moreover, it is highly unlikely such kiosks would meet the EB-5 

requirements for job creation. 

45. By misappropriating money the investors believed was being used for store 

construction to pay for unrelated lawsuits and loans, management fees, and operational expenses, 

Ogden, individually and through AJN, knowingly employed a scheme to defraud investors. 

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COMPLAINT   PAGE 13 OF 16 
SEC V. AJN INVESTMENTS, LLC, ET AL. 
 

46. The misappropriation of funds is material to investors because, among other 

reasons, it has been so extensive that Ogden and AJN have not had sufficient funds to complete 

construction of the stores contemplated in the offering materials.    

FIRST CLAIM FOR RELIEF 
Violations of Exchange Act Section 10(b) and Exchange Act Rule 10b-5 

 
47. Plaintiff SEC re-alleges and incorporates paragraphs 1 through 46 of this 

Complaint by reference as if set forth verbatim in this Claim.  

48. Defendants Ogden and AJN directly or indirectly, singly or in concert with others, 

in connection with the purchase and sale of securities, by use of the means and instrumentalities 

of interstate commerce or by use of the mails, have (a) employed devices, schemes, and artifices 

to defraud; (b) made untrue statements of material facts and have omitted to state material facts 

necessary in order to make the statements made, in light of the circumstances under which they 

were made, not misleading; and (c) engaged in acts, practices, and courses of business which 

operated as a fraud and deceit upon purchasers, prospective purchasers, and other persons. 

49. Defendants Ogden and AJN engaged in the above-referenced conduct and made 

the above-referenced untrue and misleading statements knowingly or with severe recklessness. 

50. By reason of the foregoing, Defendants Ogden and AJN have violated, and unless 

enjoined will continue to violate, Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and 

Rule 10b-5 [17 C.F.R. § 240.10b-5] thereunder. 

SECOND CLAIM FOR RELIEF 
Violations of Securities Act Section 17(a)  

 
51. Plaintiff SEC re-alleges and incorporates paragraphs 1 through 46 of this 

Complaint by reference as if set forth verbatim in this Claim.  

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COMPLAINT   PAGE 14 OF 16 
SEC V. AJN INVESTMENTS, LLC, ET AL. 
 

52. By engaging in the acts and conduct alleged herein, Defendants Ogden and AJN 

directly or indirectly, singly or in concert with others, in the offer and sale of securities, by use of 

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

of the mails, have (a) employed devices, schemes, or artifices to defraud; (b) obtained money or 

property by means of untrue statements of material fact or omissions to state material facts 

necessary in order to make the statements made, in light of the circumstances under which they 

were made, not misleading; and (c) engaged in transactions, practices, or courses of business 

which operated or would operate as a fraud or deceit. 

53. With respect to violations of Securities Act Sections 17(a)(2) and (3), Defendants 

Ogden and AJN were at least negligent in their conduct and in the untrue and misleading 

statements alleged herein.  With respect to violations of Securities Act Section 17(a)(1), 

Defendants Ogden and AJN engaged in the referenced conduct and made the referenced untrue 

and misleading statements knowingly or with severe recklessness. 

54. By reason of the foregoing, Defendants Ogden and AJN have violated and, unless 

enjoined, will continue to violate Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)]. 

THIRD CLAIM 
Violations of Securities Act Sections 5(a) and 5(c) 

 
55. Plaintiff SEC re-alleges and incorporates paragraphs 1 through 46 of this 

Complaint by reference as if set forth verbatim in this Claim. 

56. Defendants Ogden and AJN, directly or indirectly, singly or in concert with 

others, have offered to sell, sold, and delivered after sale, certain securities and have (a) made 

use of the means and instruments of transportation and communication in interstate commerce 

and of the mails to sell securities, through the use of email, interstate carrier, brokerage 

transactions, or otherwise; (b) carried and caused to be carried through the mails and in interstate 

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COMPLAINT   PAGE 15 OF 16 
SEC V. AJN INVESTMENTS, LLC, ET AL. 
 

commerce by the means and instruments of transportation such securities for the purpose of sale 

and for delivery after sale; and (c) made use of the means or instruments of transportation and 

communication in interstate commerce or of the mails to offer to sell such securities. 

57. By reason of the foregoing, Defendants Ogden and AJN have violated, and unless 

enjoined will continue to violate, Sections 5(a) and 5(c) of the Securities Act [15 U.S.C. §§ 

77e(a) and 77e (c)]. 

PRAYER FOR RELIEF  
 

WHEREFORE, the SEC respectfully requests that the Court enter a judgment:  

I.  

Permanently enjoining Defendants Ogden and AJN from future violations of Sections 

5(a), 5(c), and 17(a) of the Securities Act [15 U.S.C. §§ 77e(a), 77e(c), and 77q(a)], and 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]. 

          II. 
 

Permanently enjoining Defendant Ogden from directly or indirectly, including but not 

limited to through any entity owned by or controlled by Defendant Ogden, soliciting or accepting 

funds from any person or entity for any unregistered offering of securities; 

III. 

Ordering Defendant Ogden to disgorge ill-gotten gains from the conduct alleged herein 

plus prejudgment interest thereon;   

  

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COMPLAINT   PAGE 16 OF 16 
SEC V. AJN INVESTMENTS, LLC, ET AL. 
 

IV. 

 Imposing a civil penalty against Defendant Ogden 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)] for violations of the federal securities laws as alleged herein; and 

V. 

 Imposing such other and further relief as the SEC may show itself entitled. 

 

Dated:  December 28, 2016  Respectfully submitted, 
        

s/Timothy L. Evans_____________________ 
Timothy L. Evans (Texas Bar No. 24065211) 
SD Florida Bar No. A5502267 
[email protected] 
  
United States Securities and Exchange Commission 
Fort Worth Regional Office 
801 Cherry Street, Suite 1900 
Fort Worth, Texas 76102 
Telephone: (817) 978-5036  
Facsimile: (817) 978-4927  
 
Attorney for Plaintiff U.S. Securities and Exchange 
Commission 

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