August 25, 2015
Since 2004, Frederick Alan Voight has allegedly raised at least $114.1 million from approximately 300 investors nationwide in a series of fraudulent promissory note offerings conducted through entities he formed and controlled, including FAVA and DayStar, a Texas limited partnership headquartered at Voight’s residence in Richmond, Texas. Throughout his scheme, Voight allegedly offered and sold one-year notes on the promise that investor monies would fund research and development activities of various public companies, including InterCore, for which Voight served as an officer and director. But in truth, the purported interest and principal FAVA and DayStar paid investors were Ponzi payments derived entirely from the funds of new investors.
Beginning in October 2014, according to the Complaint, Voight carried out a series of related note offerings through DayStar, raising $13.8 million (of the total $35.9 million raised through DayStar) from 260 investors nationwide by promising investors that their money would be used to fund InterCore’s acquisition of a “lucrative business opportunity” involving its Driver Alertness Detection System (“DADS”) technology (“DADS Offering”), which it claims can alert drivers of microsleep in advance of dangerous fatigue levels or driving accidents. Voight allegedly promised annual interest payments to investors of as much as 42%. But as a member of InterCore’s Board of Directors and its Vice President of Business Development and Investments, Voight knew the touted InterCore opportunity did not exist and that InterCore had no means of paying investors the promised returns. All $13.8 million of investor proceeds from the DADS Offering is gone. Voight allegedly spent $8.6 million in Ponzi interest payments to prior investors (approximately $7.2 million to FAVA investors, and approximately $1.4 million to DayStar investors), and secretly funneled $4.7 million to InterCore and its subsidiary, IRC – through his alter ego entities Rhine and Topside in exchange for cash, stock, and other compensation that primarily inured to Voight’s personal benefit. According to the Complaint, Voight raised approximately $78.1 million through FAVA and approximately $36 million through DayStar ($13.8 million of which was the DADS Offering). All purported interest and principal payments to investors were, in fact, Ponzi payments and were not the result of return on their investment.
The SEC is asking to bar Voight from the industry, ordering Voight and DayStar to pay, jointly and severally, disgorgement plus prejudgment interest in an amount to be determined by the Court, and ordering Voight and DayStar to pay civil penalties in amounts to be determined by the Court; among other things.