On January 10, 2023, the United States District Court for the Southern District of New York entered a final consent judgment against defendant Jason Sugarman, ordering him to pay over $10.2 million dollars in disgorgement, interest, and penalties. The judgment resolves the SEC’s charges against Sugarman for his role in a scheme to defraud ten pension funds out of $43 million in connection with the issuance of limited recourse Native American tribal bonds between 2014 and 2015.
According to the SEC’s complaint (filed on June 27, 2019, and amended on November 2, 2022) Sugarman, and his partner Jason Galanis, acquired control of two investment advisers so that they and their associates could use the advisers’ clients’ funds to purchase Native American tribal bonds. While the bond sale proceeds were supposed to be invested in annuities to benefit the tribal corporation and repay the bondholders, the complaint alleged that Sugarman and his associates instead misappropriated the proceeds for their own benefit, including using proceeds of the initial round of bond sales to finance the acquisition of a foreign insurance company that was, in turn, used to acquire the second investment adviser used in the scheme.
Source: SEC Obtains Final Judgment Against Defendant Charged in $43 Million Tribal Bonds Scheme