WASHINGTON, DC - The Securities and Exchange Commission has frozen the assets of an Illinois man and his company after they were accused of operating a Ponzi-like scheme.
The man, Kenneth D. Courtright, III and his company, Todays Growth Consultant Inc., (TGC), also known as "The Income Store," headquartered in Minooka, Illinois, southwest of Chicago, raised at least $75 million from more than 500 investors throughout the U.S. and overseas.
According to the company's website, which has since been taken down, the company was featured in stories by MarketWatch, Business News Daily, USA Today and Forbes.
According to the SEC's complaint, from at least 2017 through until last October, TGC and Courtright, the company's founder and current chairman, promised investors an endless minimum guaranteed rate of return on revenues generated by websites. In exchange for an investor's "upfront fee," TGC claimed that it would either buy or build a website for the investor, and develop, market, and maintain the website.
TGC allegedly falsely promised that it would use investors' funds exclusively for expenses related to the investor's website. In reality, the sales were conducted through unregistered securities offerings, and TGC used new investors' funds to pay investor returns, in Ponzi-like style, and to pay Courtright's personal expenses, including his mortgage and private school tuitions for his family.
"TGC and Courtright's alleged fraud promised a guaranteed return when the company's business model and financial condition could not possibly support it," Antonia Chion, Associate Director in the SEC's Division of Enforcement said Monday. "To avoid further harm to investors and preserve the misused assets that have not already been dissipated, we have sought and obtained emergency relief."
"Today, we manage a portfolio of just under 500 revenue-generating websites for individuals, companies and private equity firms," Courtright told Franchising USA during a recent interview prior to his arrest. He said his company was producing returns of 15 to 25%. "There are very few places where you can put your money that's decent, let alone a double digit return that's guaranteed," he said.
The SEC's complaint, filed in federal court in Chicago on the 27th of last month, and unsealed on Monday, charges Courtright and TGC with violations of the antifraud and registration provisions of the federal securities laws, and seeks certain emergency relief as well as permanent injunctions, return of ill-gotten gains with prejudgment interest, and civil penalties. On Dec. 30, 2019, the Court issued a temporary restraining order, ordered an asset freeze and other emergency relief, and appointed a receiver for TGC.
The SEC's investigation was conducted by Michael Brennan, Patrick L. Feeney, Jeffrey Anderson, Donato Furlano, and Michi Harthcock, with assistance from Suzanne J. Romajas. The investigation was supervised by Kevin Guerrero, Peter Rosario, and Antonia Chion. The litigation will be led by Ms. Romajas and supervised by Stephan Schlegelmilch; Robert M. Moye will assist with the litigation.