This case was last updated from U.S. District Courts on 11/19/2021 at 07:48:30 (UTC).

United States Securities and Exchange Commission v. Shumake, Jr. et al

Case Summary

On September 20, 2021, the United States Securities and Exchange Commission (“SEC” or “Plaintiff”), represented by John E. Birkenheier, attorney at SEC’s Chicago regional office, filed a civil enforcement action against Robert S. Shumake (“Shumake”), Willard L. Jackson (“Jackson”), Nicole T. Birch (“Birch”) and Ors. (collectively, “Defendants”), seeking injunctive relief and disgorgement of all ill-gotten gains along with payment of civil monetary penalties for the alleged fraudulent activity of Defendants. This case was filed in the U.S. District Court in the Eastern District of Michigan with Judges Arthur J. Tarnow and Anthony P. Patti presiding.

In the complaint Plaintiff alleged that, “The SEC brings this action to remedy two fraudulent crowdfunding offerings conducted by Defendants Shumake, Jackson, and Birch. The issuers of the securities that were fraudulently sold to members of the public were Defendant 420 Real Estate, LLC (“420 Real Estate”) and a now defunct company named Transatlantic Real Estate, LLC (“Transatlantic Real Estate”). Transatlantic Real Estate and 420 Real Estate raised funds through offerings on a crowdfunding platform hosted by Defendant TruCrowd, Inc. (“TruCrowd”). TruCrowd’s CEO, Defendant Vicent Petrescu, aka Vincent Petrescu (“Petrescu”), was responsible for selecting which issuers could use TruCrowd’s platform to conduct crowdfunding offerings.”

Plaintiff further alleged that, “Shumake and Birch offered and sold securities of Transatlantic Real Estate from September 2018 through May 2019. Shumake and Jackson offered and sold securities of 420 Real Estate from May 2019 through June 2020. Shumake was the driving force behind the both offerings, but he kept his participation secret in order to hide a past criminal conviction arising from a mortgage fraud scheme. Shumake convinced Birch to act as the chief executive officer and sole member of Transatlantic Real Estate and convinced Jackson to act in the same roles for 420 Real Estate.”

Plaintiff also alleged that, “Shumake, Birch, and Jackson made multiple false and misleading representations and omissions to investors in connection with the crowdfunding offerings. Among other things, they concealed Shumake’s past criminal history and his leading role in both offerings. And to make matters worse, they diverted hundreds of thousands of dollars from the offering proceeds for their personal benefit. None of the money raised in either offering was used to acquire or improve cannabis real estate. None of the investors in either crowdfunding offering has received any return on their investment, and few investors have recovered any of the funds they invested.”

There are seven claims for relief laid down by Plaintiff. The first, third, and fourth claims deal with the alleged violation of Section 17(a), Section 5(a) and (c) of the Securities Act. The second claim deals with the alleged violation of Section 10(b) of the Exchange Act and Exchange Act Rule 10b-5. The fifth and seventh claims deal with the alleged aiding and abetting in violation of Section 17(a), Sections 5(a) and (c) of the Securities Act. The sixth claim deals with the alleged aiding and abetting in violation of Section 10(b) of the Exchange Act and Exchange Act Rule 10b-5.

In its prayer for relief Plaintiff has requested the court to permanently enjoin Defendants, order Defendants to disgorge all ill-gotten gains with pre-judgement interest, and order the Defendants to pay civil penalties pursuant to Section 20(d) of the Securities Act  and Section 21(d)(3) of the Exchange Act along with other relief the court deems appropriate.

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Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    2:21-CV-12193

  • Filing Date:

    09/20/2021

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Finance - Security/Commodity/Exchange

Judge Details

Presiding Judge

Arthur J. Tarnow

Referral Judge

Anthony P. Patti

 

Party Details

Plaintiff

United States Securities and Exchange Commission

Defendants

Robert Samuel Shumake, Jr.

Willard L Jackson

Nicole T Birch

420 Real Estate, LLC

Vicent aka Vincent Petrescu

TruCrowd, Inc. dba Fundanna

Attorney/Law Firm Details

Plaintiff Attorneys

John E. Birkenheier

Attorney at U.S. Securities and Exchange Commission

175 W. Jackson Boulevard, Suite 1450

Chicago, IL 60604

Dante Roldan

175 W. Jackson Boulevard, Suite 1450

Chicago, IL 60604

Jerrold H Kohn

Attorney at United States Securities and Exchange Commission

175 West Jackson Blvd, Suite 900

Chicago, IL 60604

 

Court Documents

#1

#2

#3

#4

(#4) ATTORNEY APPEARANCE: Jerrold H Kohn appearing on behalf of United States Securities and Exchange Commission (Kohn, Jerrold) (Entered: 09/22/2021)

#5

(#5) ATTORNEY APPEARANCE: Dante Roldan appearing on behalf of United States Securities and Exchange Commission (Roldan, Dante) (Entered: 09/22/2021)

#6

(#6) WAIVER OF SERVICE Returned Executed. Willard L Jackson waiver sent on 9/22/2021, answer due 11/22/2021. (Birkenheier, John) (Entered: 09/23/2021)

#7

(#7) WAIVER OF SERVICE Returned Executed. Robert Samuel Shumake, Jr. waiver sent on 9/22/2021, answer due 11/22/2021. (Birkenheier, John) (Entered: 09/29/2021)

#8

(#8) WAIVER OF SERVICE Returned Executed. 420 Real Estate, LLC waiver sent on 9/23/2021, answer due 11/22/2021. (Birkenheier, John) (Entered: 09/30/2021)

#9

(#9) WAIVER OF SERVICE Returned Executed. TruCrowd, Inc. dba Fundanna waiver sent on 9/21/2021, answer due 11/22/2021. (Birkenheier, John) (Entered: 09/30/2021)

#10

(#10) WAIVER OF SERVICE Returned Executed. Vicent aka Vincent Petrescu waiver sent on 9/21/2021, answer due 11/22/2021. (Birkenheier, John) (Entered: 09/30/2021)

#11

(#11) WAIVER OF SERVICE Returned Executed. Nicole T Birch waiver sent on 9/22/2021, answer due 11/22/2021. (Birkenheier, John) (Entered: 10/07/2021)

#12

(#12) NOTICE by United States Securities and Exchange Commission of Settlements in Principle with Defendants Birch, Petrescu, and TruCrowd, Inc. (Birkenheier, John) (Entered: 10/18/2021)

 

Docket Entries

  • 10/18/2021
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  • Docket(#12) NOTICE by United States Securities and Exchange Commission of Settlements in Principle with Defendants Birch, Petrescu, and TruCrowd, Inc. (Birkenheier, John) (Entered: 10/18/2021)

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  • 10/07/2021
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  • Docket(#11) WAIVER OF SERVICE Returned Executed. Nicole T Birch waiver sent on 9/22/2021, answer due 11/22/2021. (Birkenheier, John) (Entered: 10/07/2021)

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  • 09/30/2021
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  • Docket(#10) WAIVER OF SERVICE Returned Executed. Vicent aka Vincent Petrescu waiver sent on 9/21/2021, answer due 11/22/2021. (Birkenheier, John) (Entered: 09/30/2021)

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  • 09/30/2021
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  • Docket(#9) WAIVER OF SERVICE Returned Executed. TruCrowd, Inc. dba Fundanna waiver sent on 9/21/2021, answer due 11/22/2021. (Birkenheier, John) (Entered: 09/30/2021)

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  • 09/30/2021
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  • Docket(#8) WAIVER OF SERVICE Returned Executed. 420 Real Estate, LLC waiver sent on 9/23/2021, answer due 11/22/2021. (Birkenheier, John) (Entered: 09/30/2021)

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  • 09/29/2021
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  • Docket(#7) WAIVER OF SERVICE Returned Executed. Robert Samuel Shumake, Jr. waiver sent on 9/22/2021, answer due 11/22/2021. (Birkenheier, John) (Entered: 09/29/2021)

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  • 09/23/2021
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  • Docket(#6) WAIVER OF SERVICE Returned Executed. Willard L Jackson waiver sent on 9/22/2021, answer due 11/22/2021. (Birkenheier, John) (Entered: 09/23/2021)

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  • 09/22/2021
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  • Docket(#5) ATTORNEY APPEARANCE: Dante Roldan appearing on behalf of United States Securities and Exchange Commission (Roldan, Dante) (Entered: 09/22/2021)

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  • 09/22/2021
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  • Docket(#4) ATTORNEY APPEARANCE: Jerrold H Kohn appearing on behalf of United States Securities and Exchange Commission (Kohn, Jerrold) (Entered: 09/22/2021)

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  • 09/20/2021
  • DocketA United States Magistrate Judge of this Court is available to conduct all proceedings in this civil action in accordance with 28 U.S.C. 636c and FRCP 73. The Notice, Consent, and Reference of a Civil Action to a Magistrate Judge form is available for download at #http://www.mied.uscourts.gov (SSch) (Entered: 09/20/2021)

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  • 09/20/2021
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  • Docket(#3) SUMMONS Issued for * All Defendants * (SSch) (Entered: 09/20/2021)

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  • 09/20/2021
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  • Docket(#2) ATTORNEY APPEARANCE: John E. Birkenheier appearing on behalf of United States Securities and Exchange Commission (Birkenheier, John) (Entered: 09/20/2021)

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  • 09/20/2021
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  • Docket(#1) COMPLAINT filed by United States Securities and Exchange Commission against All Defendants with Jury Demand. Plaintiff requests summons issued. No Fee Required - US Government. County of 1st Plaintiff: USA - County Where Action Arose: USA - County of 1st Defendant: Oakland. [Previously dismissed case: No] [Possible companion case(s): None] (Birkenheier, John) (Entered: 09/20/2021)

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  • 09/20/2021
  • DocketAddition of Parties to CM/ECF: Plaintiff United States Securities and Exchange Commission. Reason: The party was not added to CM/ECF Plaintiff requests summons issued. (Birkenheier, John) (Entered: 09/20/2021)

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