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The SEC Charged the CEO of Allied Energy Services, LLC with Fraud for Running a Ponzi Scheme

On July 30th, 2020, the Securities and Exchange Commission charged Clarence Dean Alford with defrauding at least 100 investors in a ponzi scheme, which he operated through Allied Energy Services, LLC (“Allied”), where he was CEO. Alford is also a former Georgia state legislator and former member of the Georgia Board of Regents. Alford sold at least $23 million worth of two types of promissory notes to at least 100 investors, claiming that the funds from one brand of note would be used to fund a waste-to-energy conversion plant in Augusta, GA, while funds from the other brand of note would be used to fund Allied’s solar program. The promissory notes were sold between January 2017 and September 2019.

Alford claimed that Allied was a robust and thriving energy company, when in reality it was struggling. In 2016, the company began providing retrofit lighting services, which became its primary source of revenue, not energy production.

Alford sent at least one investor a “Solar Business Plan”, which detailed the plan for Allied’s fake solar business. In it, Alford fraudulently claimed that Allied had partnered with major international solar companies in an effort to solicit investments.

Alford sent approximately $5.79 million of funds from the promissory notes to his personal bank accounts. He used the funds to buy a Tesla and a house in Utah, to pay off credit card bills, withdrew over $51,000 in cash, and made almost $14,000 in political contributions. He also used funds to finance his other business ventures. The scheme eventually collapsed. Allied has since ceased operations and voluntarily filed Chapter 7 bankruptcy in February 2020.

Whether one is a broker, CEO, former politician, or any other occupation, the potential for fraud is always there. If you wish to discuss any securities related question, please contact David A. Weintraub, P.A., 7805 SW 6th Court, Plantation, FL  33324.  By phone: 954.693.7577 or 800.718.1422.