SOUTH BEND, Ind. (AP) – Federal officials are suing a northern Indiana man, saying he bilked $3.9 million from at least 70 novice investors, including many who are Amish.
The Securities and Exchange Commission filed the federal lawsuit against 36-year-old Earl Miller of Goshen last week, The Elkhart Truth reports. The SEC accuses Miller of persuading people to invest in two companies he owned dealing with real estate and green product investments, and then repeatedly lying about how the money was used.
“Miller encouraged people who trusted him to invest their money with 5 Star Commercial and 5 Star Capital,” the complaint says. “Many of Miller’s investors are financial novices.”
Miller also recruited investors from the local Amish community, advertising in Amish newspapers and at community meetings, according to the complaint. Investors were given a promissory note, the complaint says, with a fixed-rate of return of 8 percent to 12 percent.
The complaint says Miller took $1 million from 5 Star Commercial for personal use, despite telling investors he wouldn’t get paid for managing the fund. He also told investors that money would go exclusively toward real estate, but he transferred more than $390,000 into speculative companies supposedly making green products, according to the complaint.
The SEC also accuses Miller of lying about 5 Star Capital having patents on many green products that he would invest in, when it owned no such patents. The company invested in several companies supposedly developing products, but most investments failed almost as soon as they were made, according to the complaint.
The Indiana Securities Division recently accused Miller of selling promissory notes to at least 37 investors totaling more than $1 million. He entered into an agreement with the agency in April and agreed to a civil penalty of $5,000.
Miller’s attorney, Joseph Dever, said he was aware of the SEC’s lawsuit but declined to comment.