This case was last updated from PACER on 05/30/2021 at 09:19:20 (UTC).

U.S. SECURITIES AND EXCHANGE COMMISSION v. BLANKENBAKER et al

Case Summary

On March 31, 2021, the Securities and Exchange Commission (“SEC”), represented by Robert M. Moye, attorney at U.S. Security & Exchange Commission filed a civil enforcement action against George S. Blankenbaker (“Blankenbaker”), Blankenbaker Investments Fund, StarGrower Commercial Bridge Loan Fund LLC and StarGrower Asset Management LLC (collectively, “Defendants”) seeking injunctive relief, disgorgement of all ill-gotten gains among other reliefs for illegal offering fraud scheme. This case was filed in the U.S. District Court for the Southern District of Indiana, with Judges James Patrick Hanlon and Tim A. Baker presiding. 

 

In its complaint, the SEC alleged that “In less than three years, Blankenbaker and his companies raised more than $11 million from at least 109 investors, and falsely told investors that their money would be used to make short-term loans to food exporters in Asia, that the investors would receive interest payments from the profits generated from the loans, and that investments were secured by shipping containers holding the food products.” “He also misappropriated at least $1.7 million in investor funds for his own personal benefit. Blankenbaker also used at least $965,000 in new investor funds to make Ponzi-style payments to prior investors.”

 

The SEC further alleged that “In addition to being fraudulent, two of Blankenbaker’s three securities offerings violated the registration provisions of the federal securities laws.” “From at least August 2016 through May 2019, Blankenbaker raised at least $10.4 million, from at least 108 investors in nine states, by selling securities issued by StarGrower Commercial and StarGrower Asset. Neither offering was registered with the SEC.” “Blankenbaker – speaking orally to investors, through the offering and marketing documents he created, and via the instructions he gave to the sales agents – further represented to investors that the loans were secured by the contents of the food exporters’ shipping containers. Blankenbaker represented that StarGrower Commercial, StarGrower Asset, or their affiliates, could take possession of the shipping containers because they held the bills of lading until the exporter repaid the loan. Blankenbaker further touted the safety of the investments by representing that if the exporter did not repay the loan on time, a StarGrower Commercial or StarGrower Asset affiliate would sell the contents of the container to recover the loan value.”

 

There are three claims for relief laid down by the SEC. The first claim is for the alleged violations of Section 10(b) of the Exchange Act and Exchange Act Rule 10b-5 against all defendants. The second claim is for the alleged violations of Section 17(a) of the Securities Act by all defendants. The third claim is for the alleged violations of Section 5(a) and 5(c) of the Securities Act (Against Defendants Blankenbaker, StarGrower Commercial, and StarGrower Asset).

 

In its prayer for relief, the SEC has requested the court to permanently restrain and enjoin the Defendants and all the associated persons and those persons in active concert or participation with those defendants, enter an Order of Permanent Injunction to restraint and enjoin Defendant B1 17 order, order for disgorgement of ill-gotten gains derived, and order the Defendant to pay appropriate civil penalties pursuant to Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)]. Additionally, it has also requested the Court to prohibit Blankenbaker from acting as an officer or director of any issuer that has a class of securities registered pursuant to Section 12 of the Exchange Act, and pass any other relief as it deems proper. 

 

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Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    1:21-CV-00790

  • Filing Date:

    03/31/2021

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Finance - Security/Commodity/Exchange

Judge Details

Presiding Judge

James Patrick Hanlon

Referral Judge

Tim A. Baker

 

Party Details

Plaintiff

U.S. SECURITIES AND EXCHANGE COMMISSION

Defendants

StarGrower Asset Management LLC

StarGrower Commercial Bridge Loan Fund LLC

Blankenbaker Investments Fund

George S. Blankenbaker

STARGROWER COMMERCIAL BRIDGE LOAN FUND 1 LLC

BLANKENBAKER INVESTMENTS FUND 17 LLC

Attorney/Law Firm Details

Plaintiff Attorneys

Robert M. Moye

Attorney at U.S. SECURITIES AND EXCHANGE COMMISSION

175 W. Jackson Blvd., Suite 1450

Chicago, IL 60604

Benjamin J. Hanauer

Attorney at UNITED STATES SECURITIES AND EXCHANGE COMMISSION

175 W. Jackson Blvd.

Chicago, IL 60604

Steven Lee Klawans

Attorney at US SECURITIES & EXCHANGE COMMISSION

175 West Jackson Blvd., Suite 900

Chicago, IL 60604

James Gerald O'Keefe

Attorney at UNITED STATES SECURITIES AND EXCHANGE COMMISSION

175 W. Jackson Blvd., Suite 175

Chicago, IL 60604

Defendant Attorney

Mark D. Stuaan

Attorney at BARNES & THORNBURG, LLP (Indianapolis)

11 South Meridian Street

Indianapolis, IN 46204

 

Court Documents

#18

#16

#15

#14

#13

12 #1

Text of Proposed Order Proposed Judgment

#12

11 #1

Text of Proposed Order Proposed Final Judgment

#11

#10

#9

#8

#7

#6

#5

#4

#3

#2

11 More Documents Available
View All Documents

 

Docket Entries

  • 05/17/2021
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  • Docket(#18) ORDER: CASE MANAGEMENT PLAN APPROVED AS SUBMITTED. Parties appeared by counsel on 5/17/2021, for a Telephonic Initial Pretrial Conference. Discovery not anticipated. Dispositive Motions not anticipated. Signed by Magistrate Judge Tim A. Baker on 5/17/2021.(SWM) (Entered: 05/17/2021)

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  • 05/10/2021
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  • Docket(#16) JOINT CASE MANAGEMENT PLAN TENDERED, filed by Plaintiff U.S. SECURITIES AND EXCHANGE COMMISSION and DEFENDANTS. (Hanauer, Benjamin) (Entered: 05/10/2021)

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  • 05/10/2021
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  • Docket(#15) RESPONSE (JOINT RESPONSE), re #14 Order, filed by Plaintiff U.S. SECURITIES AND EXCHANGE COMMISSION. (Hanauer, Benjamin) (Entered: 05/10/2021)

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  • 05/05/2021
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  • Docket(#14) ORDER-The parties have until May 14, 2021 to file a supplement to Docket 12 addressing the Court's concern regarding Rule 54(b) or to file an amended motion. Signed by Judge James Patrick Hanlon on 5/5/2021.(CBU) (Entered: 05/05/2021)

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  • 04/16/2021
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  • Docket(#13) SCHEDULING ORDER: Initial Pretrial Conference set for 5/17/2021 11:00 AM (Eastern Time) in Telephonic before Magistrate Judge Tim A. Baker. Parties shall participate in this conference by counsel. The information needed by counsel of record to participate in this telephonic conference will be provided by separate notification. The parties themselves may participate at their option. If a proposed Case Management Plan ("CMP") has not yet been filed, the parties are ordered to confer prior to the initial pretrial conference and prepare a proposed CMP. See Order for additional information. Signed by Magistrate Judge Tim A. Baker on 4/16/2021.(SWM) (Entered: 04/16/2021)

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  • 04/05/2021
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  • Docket(#12) MOTION to Approve Consent Judgment as to Defendant George S. Blankenbaker, filed by Plaintiff U.S. SECURITIES AND EXCHANGE COMMISSION. (Attachments: #1 Text of Proposed Order Proposed Judgment)(Hanauer, Benjamin) Modified on 4/6/2021 (DWH). (Entered: 04/05/2021)

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  • 04/05/2021
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  • Docket(#11) MOTION to Approve Consent Judgment as to Defendants StarGrower Commercial Bridge Loan Fund 1 LLC, StarGrower Asset Management LLC, and Blankenbaker Investments Fund 17 LLC, filed by Plaintiff U.S. SECURITIES AND EXCHANGE COMMISSION. (Attachments: #1 Text of Proposed Order Proposed Final Judgment)(Hanauer, Benjamin) Modified on 4/6/2021 (DWH). (Entered: 04/05/2021)

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  • 04/02/2021
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  • Docket(#10) NOTICE of Appearance by Steven Lee Klawans on behalf of Plaintiff U.S. SECURITIES AND EXCHANGE COMMISSION. (Klawans, Steven) (Entered: 04/02/2021)

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  • 04/02/2021
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  • Docket(#9) PRACTICES AND PROCEDURES before Judge James Patrick Hanlon. (DWH) (Entered: 04/02/2021)

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  • 04/02/2021
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  • Docket(#8) NOTICE of Appearance by James Gerald O'Keefe on behalf of Plaintiff U.S. SECURITIES AND EXCHANGE COMMISSION. (O'Keefe, James) (Entered: 04/02/2021)

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  • 04/01/2021
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  • Docket(#7) NOTICE of Appearance by Benjamin J. Hanauer on behalf of Plaintiff U.S. SECURITIES AND EXCHANGE COMMISSION. (Hanauer, Benjamin) (Entered: 04/01/2021)

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  • 04/01/2021
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  • Docket(#6) NOTICE of Appearance by Robert M. Moye on behalf of Plaintiff U.S. SECURITIES AND EXCHANGE COMMISSION. (Moye, Robert) (Entered: 04/01/2021)

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  • 04/01/2021
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  • Docket(#5) MAGISTRATE JUDGE's NOTICE of Availability to Exercise Jurisdiction issued. (NLR) (Entered: 04/01/2021)

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  • 04/01/2021
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  • Docket(#4) NOTICE of Appearance by Mark D. Stuaan on behalf of Defendants George S. Blankenbaker, Blankenbaker Investments Fund, StarGrower Asset Management LLC, StarGrower Commercial Bridge Loan Fund LLC. (Stuaan, Mark) (Entered: 04/01/2021)

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  • 03/31/2021
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  • Docket(#3) CONSENT of StarGrower Commercial Bridge Loan Fund, StarGrower Asset Management, Inc. and Blankenbaker Investments Fund by U.S. SECURITIES AND EXCHANGE COMMISSION. (Moye, Robert) (Entered: 03/31/2021)

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  • 03/31/2021
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  • Docket(#2) CONSENT of George S. Blankenbaker by U.S. SECURITIES AND EXCHANGE COMMISSION. (Moye, Robert) (Entered: 03/31/2021)

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  • 03/31/2021
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  • Docket(#1) COMPLAINT against All Defendants, filed by U.S. SECURITIES AND EXCHANGE COMMISSION. (No fee paid with this filing) (Attachments: #1 Civil Cover Sheet Civil Cover Sheet)(Moye, Robert) (Attachment 1 replaced on 5/20/2021) (JD). (Entered: 03/31/2021)

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