Denton Man Pleads Guilty to Securities Fraud

Vincent J. Bazemore pleaded guilty October 19 to securities fraud in relation to a Securities and Exchange Commission civil action against Dallas-based Amerifirst Funding Inc. and its sister companies.^[1]

Bazemore sold investments under the Capital First Financial brand from his offices in Florida.^[2] Capital First was affiliated with Amerifirst, which the SEC said in its suit had raised $55 million from mostly elderly investors in Texas and Florida.^[3]

The companies sold secured debt obligation investments that were advertised as being risk-free with high returns. The SEC suit asserted otherwise saying that Amerifirst principals Jeffrey Bruteyn and Dennis Bowden used the money to finance lavish lifestyles.^[4] Amerifirst's court-appointed receiver is trying to refund money to investors.^[5]

Mr. Bazemore admitted making false and fraudulent statements. He faces a maximum sentence of five years in prison and a $250,000 fine. He is to be sentenced Feb. 15.

To prove a federal criminal securities fraud case, the government must prove beyond a reasonable doubt that: 1)the defendant used a device or scheme to defraud someone, made an untrue statement of a material fact, or failed to disclose a material fact which resulted in making the defendant's statements misleading; 2) the defendant's acts were, or failure to disclose was, in connection with the purchase or sale of securities; the defendant used the mail or telephone in connection with these acts or this failure to disclose; and the defendant acted for the purpose of defrauding buyers or sellers of securities.^[6] If the government successfully convicts the defendant on securities fraud charges, the defendant can be fined up to $1,000,000 (up to $5,000,000 if a corporation), imprisoned for up to 10 years, or both.^[7]

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^[1] Eric Torbenson, Denton man pleads guilty in fraud case, Dallas Morning News, October 19, 2007, available at http://www.dallasnews.com/sharedcontent/dws/bus/stories/102007dnbusbazemorebrf.1896464bf.html (last visited October 21, 2007).
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.
^[6] 15 U.S.C. §77a & 78a (2007).
^[7] Id.