SEC v. ROBERT FOWLER and

FILED IN CLERWS OFFICE
U.S.D.C. , Atlanta
UNITED STATES DISTRICT COURT MAY 18 2013
FOR THE NORTHERN DISTRICT OF GEORG~~~~.~ c"*
ATLANTA DIVISION . B§fi~;i;0-/
SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,
SCJ
Civil Action No.
v.
ROBERT FOWLER and
US CAPITAL FUNDING II
SERIES TRUST 1, INC.,
1= 13-CV-1656
JURY TRIAL DEMANDED
Defendants.
COMPLAINT
Plaintiff, Securities and Exchange Commission (the "Commission"), files its
complaint and alleges that:
OVERVIEW
1. This matter involves an on-going "prime bank" scheme, in which Defendant
Robert Fowler promised to have his company, US Capital Funding II Series Trust
1, Inc. ("US Capital), issue standby letters of credit or bank guarantees on behalf of
investors to a "prime bank," which would purportedly grant the investors loans
backed by the letters
of credit.

2. Among its misrepresentations to investors, US Capital's website claims that
it has assets "valued in the Trillions"
3. Fowler targeted foreign-born investors who were aspiring entrepreneurs and
small business owners. Fowler promised that, because
of the relationship between
US Capital and the designated bank and because
of US Capital's substantial assets,
the "prime" bank would lend the investor company hundreds
of millions of dollars
with the letter
of credit as security. Fowler represented to investors that at least a
portion
of the loan proceeds would be invested under the control of Fowler,
sometimes using affiliated "traders" and "trading platforms," in order to achieve a
high return. He promised that the investment returns would be used to pay
off the
loan and the leftover profits would be split between Fowler and the investor.
4. Fowler demanded an up-front fee from the investors for this service. In
some instances, Fowler promised to return the fee
if the investor was ultimately
unable to procure the promised loan.
5. In fact, the letters of credit created by Fowler from US Capital were
worthless, fictitious instruments, and US Capital had no relationships with
financial institutions to obtain loans for individuals or entities based on letters
of
credit from US CapitaL
2

6. Beginning at the latest in August 2012, Fowler, as CEO of US Capital, has
raised at least $350,000 for this scheme from at least three investors, each
of whom
were foreign-born professionals or small business owners with little or no
experience in finance or investing.
7. Rather than using the fees to facilitate the promised transaction, Fowler used
the up-front fees he received to pay personal and business expenses.
8. As part of his fraudulent scheme, Fowler provided investors and or potential
investors with a copy
of a letter from Commission staff, indicating that the staff
had closed a prior investigation into US Capital. Fowler has misrepresented to
investors and or potential investors that the letter was proof that the SEC did not
have any concerns regarding US Capital and that he and his business were
legitimate.
VIOLATIONS
9. Defendants have engaged and, unless restrained and enjoined by this Court,
will continue to engage in acts and practices that constitute and will constitute
violations
of Section 17(a) of the Securities Act of 1933 ("Securities Act") [15
U.S.C. § 77q(a)] and Section 10(b) ofthe Securities Exchange Act of 1934
("Exchange Act")
[15 U.S.C. §§ 78j(b)] and Rules 10b-5(a), (b), and (c) thereunder
[17 C.F.R. § 240.10b-5 (a), (b),
& (c)].
3

10. Additionally, Defendants have violated Section 26 of the Exchange Act [15
U.S.C. § 78z] by utilizing the termination
of a prior SEC investigation into US
Capital to communicate to investors that the SEC approved
of Defendants'
securities offerings.
JURISDICTION AND VENUE
11. The Commission brings this action pursuant to Sections 20 and 22
of the
Securities Act
[15 U.S.C. §§ 77t and 77v] and Sections 21(d) and 21(e) of the
Exchange Act
[15 U.S.C. §§78u(d) and 78u(e)] to enjoin defendants from engaging
in the transactions, acts, practices, and courses
of business alleged in this complaint,
and transactions, acts, practices, and courses
of business of similar purport and
object.
12. This Court has jurisdiction over this action pursuant to
15 U.S.C. §§ 77t,
77v, 78u(d), 78u(e), and 78aa, and pursuant to 28 U.S.C. § 1345.
13. Defendants, directly and indirectly, made use of the mails, and the means
and instruments
of transportation and communication in interstate commerce and
the means and instrumentalities
of interstate commerce in connection with the
transactions, acts, practices, and courses of business alleged in this complaint.
14. Certain
of the transactions, acts, practices, and courses ofbusiness
constituting violations
of the Securities Act and the Exchange Act occurred in the
4

Northern District of Georgia. Fowler resides in this district and US Capital has its
principal place
of business in this district. Venue is proper in this Court pursuant
to
28 U.S.C. § 1391(b)(2) and 15 U.S.C. § 78aa.
The Defendants
15. Robert Fowler age 51, resides in Duluth, Georgia, and is the CEO and
control person
of U.S. Capital Funding II Series Trust 1, Inc. (a/k/a US Capital
Investments
II (HK) Limited) ("US Capital") and the control person of US
Capital's bank accounts.
16. US Capital was a Georgia corporation formed in October 2008. During the
relevant period, Robert Fowler was the company's control person, alternatively
serving as the company's CFO and, later, CEO.
US Capital's last known place of
business was identified as Fowler's home address in Duluth, Georgia. US Capital
was officially dissolved in February 2012, but Fowler continues to use the
company's name in his solicitation
of prospective investors.
THE PRIME BANK SCHEME
17. Beginning at the latest in August 2012, Fowler, as CEO of US Capital,
raised at least $350,000 from at least three investors, each
of whom were foreign­
born professionals or small business owners with little or no experience in finance
or investing.
5

18. Fowler, in exchange for investors' initial "down payment" for a stand-by
letter
of credit ("SBLC") or bank guarantee to be issued by US Capital, offered (1)
to assist in the procurement
of commercial loans to companies owned or operated
by the investors, and (2) to control the investment
of at least a portion of the
eventual (fictitious) loan proceeds, sometimes using affiliated "traders" and
"trading platforms" in unspecified "instruments," in order to derive shared profits.
19. US Capital's website, http://www.uscapitalfundingii.com/, misrepresents
that
US Capital "has an S&P Triple-A (AAA) rating." In fact, an unaffiliated trust
by the same name actually maintains such a credit rating.
US Capital's website
also claims that it has assets "valued in the Trillions" and maintains "precious
assets in safe keeping depositories and banks around the world[.]" In fact, US
Capital does not own or control any assets, other than the funds raised from
investors.
20. The website further misrepresents that US Capital's "innovative investment
vehicles enable our clients to maximize the value
of their assets while mitigating
their financial risk."
21. Through oral statements and related transaction documents, Fowler has
entered separate investment contracts with at least three investors. The details
of
each investment were fundamentally the same: First, the investor wired money
6

into a bank account held in the name of US Capital over which Fowler had
signatory authority. Second, US Capital claimed that it would issue a  SBLC or
"bank guarantee" and, using its supposed connections with major financial
institutions (e.g.,
"a TOP 25 Bank" such as "Credit Suisse"), would obtain a loan
for the investor. Third, US Capital and Fowler claimed that the loan proceeds
would be wired to a bank account controlled
by US Capital, an affiliated "trader"
of US Capital, or, in one instance, the investor. Fourth, Fowler and US Capital
represented that they would exercise control over all or a portion
of the loan
proceeds in order to generate shared investment returns, sometimes with the use
of
affiliated "traders" and "trading platforms."
22. Fowler and US Capital have
not used the investor proceeds as represented.
Shortly after US Capital's bank accounts received investors' funds, Fowler spent
the funds at restaurants, grocery stores, gas stations, and clothing stores, and also
withdrew thousands
of dollars through ATM transactions.
23. Fowler has misrepresented to actual and or prospective investors that the
Commission has blessed US Capital's operations. Specifically, the Commission
staff had previously opened an investigation into Fowler and US Capital styled In
the Matter of US Capital Funding II, A-3199 (conducted between December 2009
7

and September 2012). The staff elected to close that investigation without
recommending the any enforcement action.
FOWLER MISREPRESENTS THAT THE COMMISSION APPROVED
THE SECURITIES HE WAS SELLING
24. In connection with closing that investigation, the staff sent Fowler a
"termination letter" on August 12, 2012, which stated, "[t]his investigation has
been completed as to you, Robert I Fowler, against whom we do not intend to
recommend any enforcement action by the Commission."
25. The letter attached Securities Act Release No. 5310, entitled "Procedures
Relating to the Commencement
of Enforcement Proceedings and Termination of
Staff Investigations." That release stated, in relevant part, that the staff "may
advise a person under inquiry that
... the investigation has been terminated", but
specifically cautioned:
Even
if such advice is  given .... it must in no way be construed as
indicating that the party has been exonerated or that no action may
ultimately result from the staff's investigation
of that particular
matter. All that such a communication means is that the staff has
completed its investigation and that at that time no enforcement action
has been recommended to the Commission.
26. After the staff closed its investigation, Fowler represented to at least
one investor that the Commission had investigated him and determined that
his investment program was legitimate.
8

27. In an attempt to dampen negative information about US Capital that
was circulated on various investor blogs and to solicit investor funds, Fowler
told at least one prospective investor that the SEC had investigated him and
found nothing wrong. Fowler also sent a copy
of the termination letter to
investors and prospective investors.
28. Fowler further justified not returning one investor's funds by falsely
claiming that the Commission had frozen US Capital's assets. To support
his claim, Fowler forwarded the investor a copy
of an investigative subpoena
issued by the Commission staff.
29. Fowler is actively soliciting new investors. On at least two occasions
in March 2013, Fowler solicited investments from prospective investors via
e-m ails.
COUNT ONE -FRAUD
Violations of Section 17(a)(l) of the Securities Act [15 U.S.C. § 77q(a)(l)]
30. Paragraphs 1 through 29 are hereby realleged and are incorporated herein by
reference.
31. From at least August 2012 to the present, Defendants, in the offer and sale
of
the securities described herein, by use of means and instruments of transportation
9

and communication in interstate commerce and by use of the mails, directly and
indirectly, employed devices, schemes and artifices to defraud purchasers
of such
securities, all as more particularly described above.
32. Defendants knowingly, intentionally, and/or recklessly engaged in the
aforementioned devices, schemes and artifices to defraud.
33. While engaging in the course
of conduct described above, defendants acted
with scienter, that is, with intent to deceive, manipulate or defraud or with reckless
disregard for the truth.
34. By reason
of the foregoing, defendants, directly and indirectly, have violated
and, unless enjoined, will continue to violate Section 17(a)(l) of the Securities Act
[15 U.S.C. § 77q(a)(l)].
COUNT TWO-FRAUD
Violations of Sections 17(a)(2) and 17(a)(3)
of the Securities Act [15 U.S.C. §§ 77g(a)(2) and 77g{a)(3)]
35. Paragraphs 1 through 29 are hereby realleged and are incorporated herein by
reference.
36. From at least August 2012 to the present, Defendants, in the offer and sale
of
the securities described herein, by use of means and instruments of transportation
10

and communication in interstate commerce and by use of the mails, directly and
indirectly:
a. obtained money and property by means of untrue statements of
material fact and 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
b. engaged in transactions, practices and courses
ofbusiness which
would and did operate as a fraud and deceit upon the purchasers
of such securities,
all as more particularly described above.
37.
By reason of the foregoing, defendants, directly and indirectly, have violated
and, unless enjoined, will continue to violate Sections 17(a)(2) and 17(a)(3)
of the
Securities Act [15 U.S.C. §§ 77q(a)(2) and 77q(a)(3)].
COUNT THREE-FRAUD
Violations of Section 1 O(b) of the Exchange Act
[15 U.S.C.
§ 78j(b)]and Rules 10b-S(a), (b), and (c)
thereunder [17 C.F.R. § 240.10b-S (a), (b), & (c)]
38. Paragraphs 1 through 29 are hereby realleged and are incorporated herein by
reference.
11

39. From at least August 2012 to the present, defendants, in connection with the
purchase and sale
of securities described herein, by the use of the means and
instrumentalities
of interstate commerce and by use of the mails, directly and
indirectly:
a. employed devices, schemes, and artifices to defraud;
b. made untrue statements of material facts and 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 ofbusiness which would and
did operate as a fraud and deceit upon the purchasers
of such securities,
all as more particularly described above.
40. Defendants knowingly, intentionally, and/or recklessly engaged in the
aforementioned devices, schemes and artifices to defraud, made untrue statements
of material facts and omitted to state material facts, and engaged in fraudulent acts,
practices and courses
of business. In engaging in such conduct, defendants acted
with scienter, that is, with an intent to deceive, manipulate or defraud or with a
severely reckless disregard for the truth.
41. By reason
of the foregoing, defendants, directly and indirectly, have violated
and, unless enjoined, will continue to violate Section IO(b)
ofthe Exchange Act
12

[15 U.S.C. § 78j(b)] and Rules 10b-5(a), (b), and (c) thereunder [17 C.F.R. §
240.10b-5(a), (b),
& (c)].
COUNT FOUR-UNLAWFUL REPRESENTATION OF SEC APPROVAL
Violations of Section 26 of the Exchan~:e Act [15 U.S.C. § 78z)
42. Paragraphs 1 through 29 are hereby realleged and are incorporated herein by
reference.
43. From at least August 2012 to the present, Defendants have communicated to
investors that the SEC had approved the investment program
of the Defendants.
44. By reason
of the foregoing, Defendants have violated and, unless enjoined,
will continue to violate Section 26 ofthe Exchange Act [15 U.S.C. § 78z].
PRAYER FOR RELIEF
WHEREFORE, Plaintiff Commission respectfully prays for:
I.
A temporary restraining order, preliminary and permanent injunctions
enjoining defendants, their officers, agents, servants, employees, and attorneys from
violating, directly or indirectly, Section 17(a)
of the Securities Act [15 U.S.C. § 77
q(a)], and Sections 10(b) and 26
ofthe Exchange Act [15 U.S.C. §§ 78j(b) and
13

78z] and Rule 10b-5(a), (b), and (c) thereunder [17 C.F.R. § 240.10b-5(a), (b), &
(c)].
II.
An order freezing the assets of the Defendants.
III.
An order requiring an accounting by Defendants of the use of proceeds of the
fraudulent conduct described in this Complaint and the disgorgement by Defendants
of all ill-gotten gains with prejudgment interest, to effect the remedial purposes of the
federal securities laws.
IV.
An order pursuant to Section 24 of the Securities Act [15 U.S.C. § 77x] and
Section 21(d)(3)
ofthe Exchange Act [15 U.S.C. §78u(d)(3)] imposing civil penalties
against Defendants.
v.
An order providing for expedited discovery.
VI.
An order requiring the Defendants to repatriate any funds transferred outside
the United States.
14

VII.
Such other and further relief as this Court may deem just, equitable, and
appropriate in connection with the enforcement
of the federal securities laws and for
the protection
of investors.
JURY DEMAND
Plaintiff hereby demands a trial by jury as to all issues so triable.
15

DATED: May 16, 2013
1
Respectfully submitted,
AI'~ WvJ ~ "-/..
at Graham Loomis
Regional Trial Counsel
Georgia
Bar No. 457868
[email protected]
W. Shawn Mumahan
Senior Trial Counsel
Georgia Bar No. 529940
[email protected]
Joshua A. Mayes
Senior Trial Counsel
Georgia Bar No. 143107
mayesj @sec.gov
COUNSEL FOR PLAINTIFF
U.S. Securities and Exchange Commission
950 East Paces Ferry Road, N.E., Suite 900
Atlanta, GA 30326
Tel:(404) 842-7600
Fax: (404) 842-7666
Pursuant to Local Rule
7.1 D, counsel for the Commission certifies that this
Complaint has been prepared in
14 point Times New Roman font, which is
approved by the Court in
LR 5.1B.
16

FILED IN CLERWS OFFICE 
U.S.D.C. , Atlanta 

UNITED STATES DISTRICT COURT MAY 18 2013 
FOR THE NORTHERN DISTRICT OF GEORG~~~~.~ c"* 

ATLANTA DIVISION . B§fi~;i;0-/ 

SECURITIES AND EXCHANGE 
COMMISSION, 

Plaintiff, 

SCJ 
Civil Action No. 

v. 

ROBERT FOWLER and 
US CAPITAL FUNDING II 
SERIES TRUST 1, INC., 

1= 13-CV-1656 
JURY TRIAL DEMANDED 

Defendants. 

COMPLAINT 

Plaintiff, Securities and Exchange Commission (the "Commission"), files its 

complaint and alleges that: 

OVERVIEW 

1. This matter involves an on-going "prime bank" scheme, in which Defendant 

Robert Fowler promised to have his company, US Capital Funding II Series Trust 

1, Inc. ("US Capital), issue standby letters of credit or bank guarantees on behalf of 

investors to a "prime bank," which would purportedly grant the investors loans 

backed by the letters of credit. 

   Case 1:13-cv-01656-SCJ Document 1 Filed 05/16/13 Page 1 of 16 



2. Among its misrepresentations to investors, US Capital's website claims that 

it has assets "valued in the Trillions" 

3. Fowler targeted foreign-born investors who were aspiring entrepreneurs and 

small business owners. Fowler promised that, because of the relationship between 

US Capital and the designated bank and because of US Capital's substantial assets, 

the "prime" bank would lend the investor company hundreds of millions of dollars 

with the letter of credit as security. Fowler represented to investors that at least a 

portion of the loan proceeds would be invested under the control of Fowler, 

sometimes using affiliated "traders" and "trading platforms," in order to achieve a 

high return. He promised that the investment returns would be used to pay off the 

loan and the leftover profits would be split between Fowler and the investor. 

4. Fowler demanded an up-front fee from the investors for this service. In 

some instances, Fowler promised to return the fee if the investor was ultimately 

unable to procure the promised loan. 

5. In fact, the letters of credit created by Fowler from US Capital were 

worthless, fictitious instruments, and US Capital had no relationships with 

financial institutions to obtain loans for individuals or entities based on letters of 

credit from US CapitaL 

2 

   Case 1:13-cv-01656-SCJ Document 1 Filed 05/16/13 Page 2 of 16 



6. Beginning at the latest in August 2012, Fowler, as CEO of US Capital, has 

raised at least $350,000 for this scheme from at least three investors, each of whom 

were foreign-born professionals or small business owners with little or no 

experience in finance or investing. 

7. Rather than using the fees to facilitate the promised transaction, Fowler used 

the up-front fees he received to pay personal and business expenses. 

8. As part of his fraudulent scheme, Fowler provided investors and or potential 

investors with a copy of a letter from Commission staff, indicating that the staff 

had closed a prior investigation into US Capital. Fowler has misrepresented to 

investors and or potential investors that the letter was proof that the SEC did not 

have any concerns regarding US Capital and that he and his business were 

legitimate. 

VIOLATIONS 

9. Defendants have engaged and, unless restrained and enjoined by this Court, 

will continue to engage in acts and practices that constitute and will constitute 

violations of Section 17(a) of the Securities Act of 1933 ("Securities Act") [15 

U.S.C. § 77q(a)] and Section 10(b) ofthe Securities Exchange Act of 1934 

("Exchange Act") [15 U.S.C. §§ 78j(b)] and Rules 10b-5(a), (b), and (c) thereunder 

[17 C.F.R. § 240.10b-5 (a), (b), & (c)]. 

3 

   Case 1:13-cv-01656-SCJ Document 1 Filed 05/16/13 Page 3 of 16 



10. Additionally, Defendants have violated Section 26 of the Exchange Act [15 

U.S.C. § 78z] by utilizing the termination of a prior SEC investigation into US 

Capital to communicate to investors that the SEC approved of Defendants' 

securities offerings. 

JURISDICTION AND VENUE 

11. The Commission brings this action pursuant to Sections 20 and 22 of the 

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

Exchange Act [15 U.S.C. §§78u(d) and 78u(e)] to enjoin defendants from engaging 

in the transactions, acts, practices, and courses of business alleged in this complaint, 

and transactions, acts, practices, and courses of business of similar purport and 

object. 

12. This Court has jurisdiction over this action pursuant to 15 U.S.C. §§ 77t, 

77v, 78u(d), 78u(e), and 78aa, and pursuant to 28 U.S.C. § 1345. 

13. Defendants, directly and indirectly, made use of the mails, and the means 

and instruments of transportation and communication in interstate commerce and 

the means and instrumentalities of interstate commerce in connection with the 

transactions, acts, practices, and courses of business alleged in this complaint. 

14. Certain of the transactions, acts, practices, and courses ofbusiness 

constituting violations of the Securities Act and the Exchange Act occurred in the 

4 

   Case 1:13-cv-01656-SCJ Document 1 Filed 05/16/13 Page 4 of 16 



Northern District of Georgia. Fowler resides in this district and US Capital has its 

principal place of business in this district. Venue is proper in this Court pursuant 

to 28 U.S.C. § 1391(b)(2) and 15 U.S.C. § 78aa. 

The Defendants 

15. Robert Fowler age 51, resides in Duluth, Georgia, and is the CEO and 

control person of U.S. Capital Funding II Series Trust 1, Inc. (a/k/a US Capital 

Investments II (HK) Limited) ("US Capital") and the control person of US 

Capital's bank accounts. 

16. US Capital was a Georgia corporation formed in October 2008. During the 

relevant period, Robert Fowler was the company's control person, alternatively 

serving as the company's CFO and, later, CEO. US Capital's last known place of 

business was identified as Fowler's home address in Duluth, Georgia. US Capital 

was officially dissolved in February 2012, but Fowler continues to use the 

company's name in his solicitation of prospective investors. 

THE PRIME BANK SCHEME 

17. Beginning at the latest in August 2012, Fowler, as CEO of US Capital, 

raised at least $350,000 from at least three investors, each of whom were foreign­

born professionals or small business owners with little or no experience in finance 

or investing. 

5 

   Case 1:13-cv-01656-SCJ Document 1 Filed 05/16/13 Page 5 of 16 



18. Fowler, in exchange for investors' initial "down payment" for a stand-by 

letter of credit ("SBLC") or bank guarantee to be issued by US Capital, offered (1) 

to assist in the procurement of commercial loans to companies owned or operated 

by the investors, and (2) to control the investment of at least a portion of the 

eventual (fictitious) loan proceeds, sometimes using affiliated "traders" and 

"trading platforms" in unspecified "instruments," in order to derive shared profits. 

19. US Capital's website, http://www.uscapitalfundingii.com/, misrepresents 

that US Capital "has an S&P Triple-A (AAA) rating." In fact, an unaffiliated trust 

by the same name actually maintains such a credit rating. US Capital's website 

also claims that it has assets "valued in the Trillions" and maintains "precious 

assets in safe keeping depositories and banks around the world[.]" In fact, US 

Capital does not own or control any assets, other than the funds raised from 

investors. 

20. The website further misrepresents that US Capital's "innovative investment 

vehicles enable our clients to maximize the value of their assets while mitigating 

their financial risk." 

21. Through oral statements and related transaction documents, Fowler has 

entered separate investment contracts with at least three investors. The details of 

each investment were fundamentally the same: First, the investor wired money 

6 

   Case 1:13-cv-01656-SCJ Document 1 Filed 05/16/13 Page 6 of 16 



into a bank account held in the name of US Capital over which Fowler had 

signatory authority. Second, US Capital claimed that it would issue a SBLC or 

"bank guarantee" and, using its supposed connections with major financial 

institutions (e.g., "a TOP 25 Bank" such as "Credit Suisse"), would obtain a loan 

for the investor. Third, US Capital and Fowler claimed that the loan proceeds 

would be wired to a bank account controlled by US Capital, an affiliated "trader" 

of US Capital, or, in one instance, the investor. Fourth, Fowler and US Capital 

represented that they would exercise control over all or a portion of the loan 

proceeds in order to generate shared investment returns, sometimes with the use of 

affiliated "traders" and "trading platforms." 

22. Fowler and US Capital have not used the investor proceeds as represented. 

Shortly after US Capital's bank accounts received investors' funds, Fowler spent 

the funds at restaurants, grocery stores, gas stations, and clothing stores, and also 

withdrew thousands of dollars through ATM transactions. 

23. Fowler has misrepresented to actual and or prospective investors that the 

Commission has blessed US Capital's operations. Specifically, the Commission 

staff had previously opened an investigation into Fowler and US Capital styled In 

the Matter of US Capital Funding II, A-3199 (conducted between December 2009 

7 

   Case 1:13-cv-01656-SCJ Document 1 Filed 05/16/13 Page 7 of 16 



and September 2012). The staff elected to close that investigation without 

recommending the any enforcement action. 

FOWLER MISREPRESENTS THAT THE COMMISSION APPROVED 
THE SECURITIES HE WAS SELLING 

24. In connection with closing that investigation, the staff sent Fowler a 

"termination letter" on August 12, 2012, which stated, "[t]his investigation has 

been completed as to you, Robert I Fowler, against whom we do not intend to 

recommend any enforcement action by the Commission." 

25. The letter attached Securities Act Release No. 5310, entitled "Procedures 

Relating to the Commencement of Enforcement Proceedings and Termination of 

Staff Investigations." That release stated, in relevant part, that the staff "may 

advise a person under inquiry that ... the investigation has been terminated", but 

specifically cautioned: 

Even if such advice is given .... it must in no way be construed as 
indicating that the party has been exonerated or that no action may 
ultimately result from the staff's investigation of that particular 
matter. All that such a communication means is that the staff has 
completed its investigation and that at that time no enforcement action 
has been recommended to the Commission. 

26. After the staff closed its investigation, Fowler represented to at least 

one investor that the Commission had investigated him and determined that 

his investment program was legitimate. 

8 

   Case 1:13-cv-01656-SCJ Document 1 Filed 05/16/13 Page 8 of 16 



27. In an attempt to dampen negative information about US Capital that 

was circulated on various investor blogs and to solicit investor funds, Fowler 

told at least one prospective investor that the SEC had investigated him and 

found nothing wrong. Fowler also sent a copy of the termination letter to 

investors and prospective investors. 

28. Fowler further justified not returning one investor's funds by falsely 

claiming that the Commission had frozen US Capital's assets. To support 

his claim, Fowler forwarded the investor a copy of an investigative subpoena 

issued by the Commission staff. 

29. Fowler is actively soliciting new investors. On at least two occasions 

in March 2013, Fowler solicited investments from prospective investors via 

e-m ails. 

COUNT ONE -FRAUD 

Violations of Section 17(a)(l) of the Securities Act [15 U.S.C. § 77q(a)(l)] 

30. Paragraphs 1 through 29 are hereby realleged and are incorporated herein by 

reference. 

31. From at least August 2012 to the present, Defendants, in the offer and sale of 

the securities described herein, by use of means and instruments of transportation 

9 

   Case 1:13-cv-01656-SCJ Document 1 Filed 05/16/13 Page 9 of 16 



and communication in interstate commerce and by use of the mails, directly and 

indirectly, employed devices, schemes and artifices to defraud purchasers of such 

securities, all as more particularly described above. 

32. Defendants knowingly, intentionally, and/or recklessly engaged in the 

aforementioned devices, schemes and artifices to defraud. 

33. While engaging in the course of conduct described above, defendants acted 

with scienter, that is, with intent to deceive, manipulate or defraud or with reckless 

disregard for the truth. 

34. By reason of the foregoing, defendants, directly and indirectly, have violated 

and, unless enjoined, will continue to violate Section 17(a)(l) of the Securities Act 

[15 U.S.C. § 77q(a)(l)]. 

COUNT TWO- FRAUD 

Violations of Sections 17(a)(2) and 17(a)(3) 
of the Securities Act [15 U.S.C. §§ 77g(a)(2) and 77g{a)(3)] 

35. Paragraphs 1 through 29 are hereby realleged and are incorporated herein by 

reference. 

36. From at least August 2012 to the present, Defendants, in the offer and sale of 

the securities described herein, by use of means and instruments of transportation 

10 

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and communication in interstate commerce and by use of the mails, directly and 

indirectly: 

a. obtained money and property by means of untrue statements of 

material fact and 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 

b. engaged in transactions, practices and courses ofbusiness which 

would and did operate as a fraud and deceit upon the purchasers of such securities, 

all as more particularly described above. 

37. By reason of the foregoing, defendants, directly and indirectly, have violated 

and, unless enjoined, will continue to violate Sections 17(a)(2) and 17(a)(3) of the 

Securities Act [15 U.S.C. §§ 77q(a)(2) and 77q(a)(3)]. 

COUNT THREE-FRAUD 

Violations of Section 1 O(b) of the Exchange Act 
[15 U.S.C. § 78j(b)]and Rules 10b-S(a), (b), and (c) 
thereunder [17 C.F.R. § 240.10b-S (a), (b), & (c)] 

38. Paragraphs 1 through 29 are hereby realleged and are incorporated herein by 

reference. 

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39. From at least August 2012 to the present, defendants, in connection with the 

purchase and sale of securities described herein, by the use of the means and 

instrumentalities of interstate commerce and by use of the mails, directly and 

indirectly: 

a. employed devices, schemes, and artifices to defraud; 

b. made untrue statements of material facts and 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 ofbusiness which would and 

did operate as a fraud and deceit upon the purchasers of such securities, 

all as more particularly described above. 

40. Defendants knowingly, intentionally, and/or recklessly engaged in the 

aforementioned devices, schemes and artifices to defraud, made untrue statements 

of material facts and omitted to state material facts, and engaged in fraudulent acts, 

practices and courses of business. In engaging in such conduct, defendants acted 

with scienter, that is, with an intent to deceive, manipulate or defraud or with a 

severely reckless disregard for the truth. 

41. By reason of the foregoing, defendants, directly and indirectly, have violated 

and, unless enjoined, will continue to violate Section IO(b) ofthe Exchange Act 

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[15 U.S.C. § 78j(b)] and Rules 10b-5(a), (b), and (c) thereunder [17 C.F.R. § 

240.10b-5(a), (b), & (c)]. 

COUNT FOUR- UNLAWFUL REPRESENTATION OF SEC APPROVAL 

Violations of Section 26 of the Exchan~:e Act [15 U.S.C. § 78z) 

42. Paragraphs 1 through 29 are hereby realleged and are incorporated herein by 

reference. 

43. From at least August 2012 to the present, Defendants have communicated to 

investors that the SEC had approved the investment program of the Defendants. 

44. By reason of the foregoing, Defendants have violated and, unless enjoined, 

will continue to violate Section 26 ofthe Exchange Act [15 U.S.C. § 78z]. 

PRAYER FOR RELIEF 

WHEREFORE, Plaintiff Commission respectfully prays for: 

I. 

A temporary restraining order, preliminary and permanent injunctions 

enjoining defendants, their officers, agents, servants, employees, and attorneys from 

violating, directly or indirectly, Section 17(a) of the Securities Act [15 U.S.C. § 77 

q(a)], and Sections 10(b) and 26 ofthe Exchange Act [15 U.S.C. §§ 78j(b) and 

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78z] and Rule 10b-5(a), (b), and (c) thereunder [17 C.F.R. § 240.10b-5(a), (b), & 

(c)]. 

II. 

An order freezing the assets of the Defendants. 

III. 

An order requiring an accounting by Defendants of the use of proceeds of the 

fraudulent conduct described in this Complaint and the disgorgement by Defendants 

of all ill-gotten gains with prejudgment interest, to effect the remedial purposes of the 

federal securities laws. 

IV. 

An order pursuant to Section 24 of the Securities Act [15 U.S.C. § 77x] and 

Section 21(d)(3) ofthe Exchange Act [15 U.S.C. §78u(d)(3)] imposing civil penalties 

against Defendants. 

v. 

An order providing for expedited discovery. 

VI. 

An order requiring the Defendants to repatriate any funds transferred outside 

the United States. 

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VII. 

Such other and further relief as this Court may deem just, equitable, and 

appropriate in connection with the enforcement of the federal securities laws and for 

the protection of investors. 

JURY DEMAND 

Plaintiff hereby demands a trial by jury as to all issues so triable. 

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DATED: May 16, 2013 1 

Respectfully submitted, 

AI'~ WvJ ~ "- /.. at Graham Loomis 
Regional Trial Counsel 
Georgia Bar No. 457868 
[email protected] 

W. Shawn Mumahan 
Senior Trial Counsel 
Georgia Bar No. 529940 
[email protected] 

Joshua A. Mayes 
Senior Trial Counsel 
Georgia Bar No. 143107 
mayesj @sec.gov 

COUNSEL FOR PLAINTIFF 
U.S. Securities and Exchange Commission 
950 East Paces Ferry Road, N.E., Suite 900 
Atlanta, GA 30326 
Tel:(404) 842-7600 
Fax: (404) 842-7666 

Pursuant to Local Rule 7.1 D, counsel for the Commission certifies that this 
Complaint has been prepared in 14 point Times New Roman font, which is 
approved by the Court in LR 5.1B. 

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