The regulator of the United States markets (Securities and Exchange Commission) has filed charges against an American fraudster who stole Sh788.3 million from American investors through a fake desalination project in Kenya.
Mr. Verley Lee SembritzkyJr. alias Rocky coned unsuspecting Americans then used part of the ‘theft’ to buy high cars, jewelry and condo for his ex-girlfriend and pay off personal credit cards with Sh219 million.
He used his firm Bounty and Ocean Harvest Mr Sembritzky when he lied that that the fraudulent water cleaning project could generate up to Sh2.19 billion in revenues every year as it provides safe and clean drinking water in Kenya.
US Securities Exchange Commission (SEC) documents show that ‘Rocky’ marketed his desalination plant as unique investment that would able to utilise everything and waste nothing and in the end generate some outstanding profits to investors.
Mr Sembritzky based plant on an elaborate, scientific-looking diagramand made a convincing explanation on how the process works as he lied that it had been working on desalination technology since 2006.
“Sembritzky knew, however, that when the process, as described in the PPM (private placement memorandum), was tested at some point before 2017, it did not work…Sembritzky knew his representations and omissions to investors about the process were, at a minimum, misleading,” SEC said in court records.
The con knew that his thing wasn’t working but went out to get funds for the project through a private placement in Kenya and the US.
He managed to con some American investors Sh2.19 billion from on what he claimed was pre-construction costs associated with the Project and the Sh19.1 billion were fraudulently acquired from Kenyan investors.
Mr Sembritzky lied to the Kenyan Investors that they could buy stock in the Project Entity at Sh19.2 million) per share with their investments earning billions in profit.
And between 2015 and 2016 the American managed to con 20 more American investors up to Sh788.3 million by duping them to send their investment funds directly to Bounty or Ocean Harvest accounts.
Immediately or just days after receiving the investor funds, Sembritzky transferred them from the accounts to his personal bank accounts.
He would then withdraw up to Sh700 million) from the Bounty and Ocean Harvest bank accounts in the form of cash withdrawals or make transfers to his personal accounts.
After coning the unsuspecting American investors Sh788.3 million, his project’s bank account in Kenya only received Sh71.1 million of the funds.
But Mr Sembritzky in his defense claims that his personal use of investor funds was part of a projected Sh1.6 billion Intellectual Property License Payment that is listed in the private placement offer.
SEC argued that the memorandum did not state that all or any portion of the funds would go to Sembritzkyt’s personal accounts.
Court documents in Texas shows that a Houston man who raised around $7.2 million for the fake clean water project had reached a settlement with the SEC after Sembritzky was found to have spent the funds on himself.