SEC: $158 million is owed by Larry Polhill
San Bernardino County resident Larry Polhill owed 485 clients $158 million. SEC papers presented in court indicate that it is primarily believed to be a multi-decade fraud scheme targeting investors.
Larry Polhill is the target of a case brought by the Securities and Exchange Commission in Grand Terrace Federal Court.
The court said that Larry Polhill owes around $160 million as a consequence of the fraud he perpetrated through American Pacific Financial Corporation. He serves as the Chief Executive Officer of American Pacific Financial Corporation.
The Securities and Exchange Commission claims that he supplied bogus commitments for all of his sucker’s note contracts, including the assertion that they were backed by specific or comparable assets.
Larry Polphill promised investors annual returns ranging from 5 to 17 percent, despite the fact that the purported security would occasionally go missing or worsen. In a news statement, the SEC claimed that Larry had auctioned off all of the properties owned by his investors without informing any of his victims.
All of Larry Polhill’s stakes in limited partnerships, or “Funds,” were given away.
Larry Polphill has presided over the company as president since 1978, as per the lawsuit.
According to authorities responding to the Securities and Exchange Commission’s complaint, practically all of the lucrative APFC ventures ended in failure without the investors’ knowledge.
Consequently, the value of the property that APFC owned in order to guarantee the loans that investors obtained decreased.
According to a 2011 forensic evaluation based on APFC’s board of unsecured creditors, more than 83% of the company’s 2005 holdings were eventually written off to pay off outstanding debts, suggesting that the company was bankrupt, if not decades earlier.
When APFC launched an insolvency litigation against Larry Polhill, it was discovered that 485 unpaid trust holders’ notes totaling $103 million were in control, in addition to $55 million that was due to the Funds.
A Chapter 11 Trustee was mandated by the bankruptcy judge in 2012 to investigate and oversee APFC’s operations, which primarily revolve around allegations of dishonesty. The Chapter 7 Trustee states that Larry Polhill was initially accused of scams and that the claims were made through adversarial proceedings.
Restitution and punishment for securities fraud, including a temporary restraining order, are what the Securities and Exchange Commission is requesting.
SEC: What is it?
The federal agency in charge of regulating the securities markets and protecting investors is the Securities and Exchange Commission (SEC) of the United States.
With the United States Security Act’s passage in 1933, it was established. It was established in order to take accountability for the 1929 stock market crisis, which left every investor experiencing a catastrophic decline.
The Securities and Exchange Commission (SEC) is an independent federal government agency tasked with protecting investors, guaranteeing fair and controlled operation of the Security Marketplaces, and facilitating fund developments.
Case Study
Larry Polhill v. Security and Exchange Commission
Summary
In this case, Larry Polhill managed an investment scam that lasted for decades and affected over 485 individuals. These victims are currently owed around $160 million by American Pacific Financial Corporation.
Larry Polhill used APFC to buy and sell real estate and distressed assets, enabling customers to conduct business mostly through the unregulated issuance of promissory notes that were allegedly secured by specific parcels of real estate.
Larry Polhill misled investors about the following key points during APFC’s note issuance:
When there was no such ownership stake, Mr. Larry misled investors by stating that the obligations were guaranteed and secured by a specific property.
He also failed to mention that any security that did exist was usually previously pledged to other creditors.
It was a false statement made by Larry Polhill that he would alert investors if their investments were delinquent.
Defendant, or Larry Polhill,
Grand Terrace, California is the home place of Larry R. Polhill. He was APFC’s CEO and occasionally managed the company’s operations.
Associated Business, APFC
Founded in 1978, American Pacific Financial Corporation has its headquarters located in San Bernardino, California. APFC presented itself as a stand-alone startup financing and investment property company.
APFC filed a Chapter 11 bankruptcy lawsuit in the United States Bankruptcy Division for the District of Nevada. Investment partners of APFC are classified as unprotected creditors in the bankruptcy filing process.
An explanation of the facts
The context
Upon its founding in 1978, American Pacific Financial Corporation functioned as a brokerage for a real estate company. After taking over, Larry Polhill largely used the company to invest in real estate.
Within the parameters set forth by the property corporation for the investors, APFC planned to make periodic interest payments at rates ranging from 5% to 17% annually.
Additionally, investors fund limited liability corporations (also known as Funds) promoted by the APFC.
To the astonishment of investors, the majority of APFC’s activities failed even though some of them were lucrative. Consequently, the property owned by APFC that was used to secure the debts held by creditors lost value in the market.
Subsequently, the company filed for bankruptcy after 83% of its 2005 interests were liquidated due to excessive obligations.
The business owned by Larry Polhill filed for Chapter 11 bankruptcy, claiming that $55 million had been paid to the Funds and that around $103 million was owed to over 485 promise owners on unsecured notes.
The fraudulent promissory note of Larry Polhill
The majority of Larry Polhill’s securities offerings were APFC notes of promise. Polhill gave investors the assurance that their investments would yield interest paid on a quarterly or monthly basis, be safe because they were backed by assets owned by the APFC, and be guaranteed for a predetermined period.
On behalf of the APFC, Polhill personally approved each note and was in charge of choosing the things that may be used as security on each note.
Larry Polhill’s misrepresentation of the notes’ security
Regarding the security of APFC’s promissory notes, he mislead investors. The notes made it clear that there were security measures in place to secure them.
The Unregistered Securities Offering of Larry Polhill
In addition to defrauding people, Polhill violated securities registration laws. As was previously mentioned, Polhill gave investors the option to invest in the APFC Funds or the promissory note.
For instance, several other con artists, including Larry Polhill, have carried out the crimes; you can find out more about them by visiting the following link: https://www.sec.gov/litigation/litreleases/lr-22811
| Name | Offering Period | Funds Raised Since 2005 |
| American Pacific Financial Group, LP | 1989-2007 | About $6 million |
| American Pacific Financial Group, LP | 1993-2007 | About $5 million |
| American Pacific Financial Group, LP | 1989-2007 | About $3 million |
The Bottom Line
The founder of American Pacific Financial Corporation was Larry Polhill. In addition to portraying several customers, he performs numerous frauds. The SEC filed for bankruptcy against him as a result.
The case concerns an approximately $160 million investment scam that lasted for decades and involved 485 participants. The scam was handled by the accused, Larry R. Polhill, during all relevant times and involved American Pacific Financial Corporation.