SEC Files Fraud Charges Involving Gold Hawgs Development Corp. Crypto Offering

The Securities and Exchange Commission (SEC) has filed fraud charges against Paul A. Garcia of Severance, Colorado, for allegedly stealing approximately one-quarter of investor funds raised for Gold Hawgs Development Corp.

Gold Hawgs reportedly sought to develop a gold hawg token that would be backed by gold. The company raised funding to pursue an initial coin offering that apparently never took place.

According to the SEC’s complaint, filed in the United States District Court for the District of Colorado, from August through October 2019, Gold Hawgs raised $400,000 from 16 investors for the creation of a new cryptocurrency. Instead of using all of the investor funds to develop Gold Hawgs’ business, Garcia, the chief financial officer and a 50% owner of the company, allegedly stole approximately $123,000 of the money raised from investors by transferring the funds to another company that he controlled; he then allegedly used the money to pay for various personal and business expenses unrelated to Gold Hawgs.

By May of 2020, the company is said to have failed and moved to wind down its operations. During November and December 2020, Gold Hawgs repaid all but one of the sixteen investors $6,875 each, or 27.5% of their initial $25,000 investment.

The SEC’s complaint charges Garcia with violating Sections 17(a)(1) and (a)(3) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rules 10b-5(a) and (c) thereunder, and seeks a permanent injunction, disgorgement of all ill-gotten gains plus prejudgment interest, and a civil penalty. The SEC also names Office Guru Franchise Group, Inc., another company controlled by Garcia, as a relief defendant.

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