The U.S. Securities and Exchange Commission (SEC) filed fraud charges alleging Alonzo R. Cahoon, 51, a Morgan-based advisor, concealed income and mislead investors. SEC documents allege that Cahoon partnered with Ronald A. Fossum Jr., based in Snohomish, Wash., to bilk investors of hundreds of thousands of dollars.
According to an SEC complaint filed Dec. 20, Fossum allegedly used the money to live rent-free, pay taxes and travel the world and, like Cahoon, was also recently charged with fraud.
According to court documents, Fossum and Cahoon solicited investments through the sale of promissory notes, promising 8 to 12 percent in annual returns “through investing in distressed debt, oil and natural gas concerns, real estate, domain names and websites, stocks, bonds, options and other derivative investments.” Together, the two allegedly raised $20 million from more than 100 investors through unregistered securities offerings.
In June of 2016, all the SMFG funds—made up of three others including Accelerated Asset Group, Smart Money Secured Income Fund, and Turnkey Investment Fund—filed for bankruptcy.
Cahoon was the manager of Turnkey from its inception in mid-2014 until his resignation in March of 2015 and was never registered as or associated with a broker-dealer. He was responsible for identifying the operators and projects in which Turnkey Fund invested and handled Turnkey’s daily affairs.