This case was last updated from PACER on 09/01/2021 at 07:33:33 (UTC).

Securities and Exchange Commission v. Dawson L. Davenport et al

Case Summary

On August 31, 2021, the Securities and Exchange Commission (“SEC”), represented by Kathryn C. Wanner and Sara D. Kalin attorneys at the SEC’s LA regional office, filed a civil enforcement action against Dawson L. Davenport, Elite Aerospace Group, Inc. (f/k/a Elite Aviation Products, Inc.), Robert A. Gunton, Andrea J. Lindstrom and Ors. (collectively, “Defendants”), seeking injunctive relief and disgorgement together with prejudgment interest for the alleged fraudulent schemes of the Defendants. This case was filed in U.S. District Court in the Central District of California with Judge Josephine L. Staton and Judge John D. Early presiding.

 

In the complaint the Plaintiff alleged that, “This matter concerns two overlapping fraudulent schemes, both involving the sale of Elite Aerospace Group, Inc. (“Elite”) securities. The “Boiler Room Scheme” raised approximately $67 million between 2014 and 2018, and involved Elite paying undisclosed commissions to salespeople who solicited investments in Elite, as well as more than $35,000 per week to entities controlled by securities fraud recidivist Michael Owens for “consulting services” primarily related to the offering, but misleadingly disguised as marketing fees.”

 

The Plaintiff further alleged that, “As part of the Boiler Room Scheme, Owens, Davenport, Lindstrom, Tillman, and Zia engaged in deceptive conduct involving the concealment of commissions to salespeople who solicited investments in Elite, and the failure to disclose the true amount of investor proceeds that Elite spent on offering costs. In addition, Owens acted as an unregistered broker by, for example, setting up and controlling the boiler room, and providing lead lists to Elite’s salespeople. By 2018, Davenport, Lindstrom, Tillman and Zia continued the scheme to defraud investors by making false statements in Elite’s unaudited financial statements about alleged acquisitions in the second quarter of Elite’s 2018 fiscal year.”

 

The Plaintiff also alleged that, “ The “RMMH Scheme” involved Owens’ entity, RMMH, LLC (“RMMH”), selling approximately $2 million of unregistered Elite common stock in 2017, and issuing Elite stock certificates to about 20 purchasers without the knowledge or authorization of Tillman and Zia. As part of the RMMH Scheme, Owens, Davenport, Gunton, Lindstrom, and Yale engaged in deceptive conduct including failing to inform Tillman and Zia about the offering, misrepresenting to purchasers that Elite’s transfer agent would issue their stock certificates, and being involved with the issuance of unauthorized stock certificates.”

 

There are five claims for relief laid down by the Plaintiff.  The first and second claims alleged deal with the fraud in connection with the purchase or sale of securities in violations of Section 10(b) of the Exchange Act and Rules 10b-5(a),(c) and (b), the third alleged claim deals with  fraud in the offer or sale of securities in violations of Sections 17(a)(1) and 17(a)(3) of the Securities Act, the fourth claim alleged deals with unregistered offer and sale of securities in violations of Sections 5(a) and 5(c) of the Securities Act, and the fifth claim alleged deals with  unregistered broker-dealer in violation of Section 15(a) of the Exchange Act.

 

In the prayer for relief, the Plaintiff has requested the Court to permanently enjoin the Defendants; order Defendants to disgorge all funds received from their illegal conduct, together with prejudgment interest; order Defendants to pay civil penalties; and enter an order against Defendants prohibiting them from participating in any offering of penny stock along with such other and further relief as this Court may determine to be just and necessary.

 

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Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    8:21-CV-01427

  • Filing Date:

    08/31/2021

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Finance - Security/Commodity/Exchange

  • Courthouse:

    California Central District

Judge Details

Presiding Judge

Josephine L. Staton

Referral Judge

John D. Early

 

Party Details

Plaintiff

Securities and Exchange Commission

Defendants

Elite Aerospace Group, Inc.

Dawson L. Davenport

Elite Aviation Products, Inc.

Robert A. Gunton

Andrea J. Lindstrom

Michael P. Owens

Dustin B. Tillman

Julie A. Yale

Zeeshawn S. Zia

Attorney/Law Firm Details

Plaintiff Attorneys

Kathryn C Wanner

Attorney at Securities and Exchange Commission

444 South Flower Street Suite 900

Los Angeles, CA 90071

Sara D Kalin

Attorney at Securities and Exhange Commission

444 South Flower Street Suite 900

Los Angeles, CA 90071

 

Court Documents

#7

(#7) 21 DAY Summons Issued re Complaint (Attorney Civil Case Opening) #1 as to Defendants Dawson L. Davenport, Elite Aerospace Group, Inc., Robert A. Gunton, Andrea J. Lindstrom, Michael P. Owens, Dustin B. Tillman, Julie A. Yale, Zeeshawn S. Zia. (ghap) (Entered: 08/31/2021)

#6

(#6) Notice to Counsel Re Consent to Proceed Before a United States Magistrate Judge. (ghap) (Entered: 08/31/2021)

#5

(#5) NOTICE TO PARTIES OF COURT-DIRECTED ADR PROGRAM filed. (ghap) (Entered: 08/31/2021)

#4

(#4) NOTICE OF ASSIGNMENT to District Judge Josephine L. Staton and Magistrate Judge John D. Early. (ghap) (Entered: 08/31/2021)

#3

(#3) Request for Clerk to Issue Summons on Civil Cover Sheet (CV-71) #2 , Complaint (Attorney Civil Case Opening) #1 filed by Plaintiff Securities and Exchange Commission. (Wanner, Kathryn) (Entered: 08/31/2021)

2 #1

Attached Counsel Party List

2 #2

Main Document

#1

(#1) COMPLAINT No Fee Required - US Government, filed by Plaintiff Securities and Exchange Commission. (Attorney Kathryn C Wanner added to party Securities and Exchange Commission(pty:pla))(Wanner, Kathryn) (Entered: 08/31/2021)

 

Docket Entries

  • 08/31/2021
  • View Court Documents
  • Docket(#7) 21 DAY Summons Issued re Complaint (Attorney Civil Case Opening) #1 as to Defendants Dawson L. Davenport, Elite Aerospace Group, Inc., Robert A. Gunton, Andrea J. Lindstrom, Michael P. Owens, Dustin B. Tillman, Julie A. Yale, Zeeshawn S. Zia. (ghap) (Entered: 08/31/2021)

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  • 08/31/2021
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  • Docket(#6) Notice to Counsel Re Consent to Proceed Before a United States Magistrate Judge. (ghap) (Entered: 08/31/2021)

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  • 08/31/2021
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  • Docket(#5) NOTICE TO PARTIES OF COURT-DIRECTED ADR PROGRAM filed. (ghap) (Entered: 08/31/2021)

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  • 08/31/2021
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  • Docket(#4) NOTICE OF ASSIGNMENT to District Judge Josephine L. Staton and Magistrate Judge John D. Early. (ghap) (Entered: 08/31/2021)

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  • 08/31/2021
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  • Docket(#3) Request for Clerk to Issue Summons on Civil Cover Sheet (CV-71) #2 , Complaint (Attorney Civil Case Opening) #1 filed by Plaintiff Securities and Exchange Commission. (Wanner, Kathryn) (Entered: 08/31/2021)

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  • 08/31/2021
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  • Docket(#2) CIVIL COVER SHEET filed by Plaintiff Securities and Exchange Commission. (Attachments: #1 Attached Counsel Party List)(Wanner, Kathryn) (Entered: 08/31/2021)

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  • 08/31/2021
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  • Docket(#1) COMPLAINT No Fee Required - US Government, filed by Plaintiff Securities and Exchange Commission. (Attorney Kathryn C Wanner added to party Securities and Exchange Commission(pty:pla))(Wanner, Kathryn) (Entered: 08/31/2021)

    Read MoreRead Less
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