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Date: 09-10-2020
Case Style:
United States of America v. Timothy Andrew Nemeckay
Case Number: 2:20-cr-00278-DBB
Judge: David Barlow
Court: United States District Court for the District of Utah (Salt Lake County)
Plaintiff's Attorney: United States District Attorney’s Office
Defendant's Attorney:
Call 855-853-4800 for help finding a criminal defense lawyer in Salt Lake City, Utha for a securities fraud, making false statements to the Security Exchange Commission (SEC), wire fraud, and money laundering in connection with an alleged fraud scheme case.
Description:
Salt Lake City, UT - The United States of America charged Timothy Andrew Nemeckay, age 60, with securities fraud, making false statements to the Security Exchange Commission (SEC), wire fraud, and money laundering in connection with an alleged fraud scheme.
According to the indictment, Nemeckay was the founder and manager of Mine Shaft Brewing, a Park City business. The indictment alleges Nemeckay represented to investors that Mine Shaft was raising funds to develop a brewery and restaurant in Park City and later in Santa Clarita, California. Nemeckay collected approximately $2.7 million from approximately 100 investors from across the United States in connection with the Mine Shaft investment offering, the indictment alleges. The indictment alleges the fraud scheme started in early 2013 and continued until around July 6, 2020.
“Far too many Utah headlines report homegrown fraud schemes. There are disproportionate numbers of wolves in sheep’s clothing in our state. In this indictment, the alleged offender was even under the thumb of securities regulators when he persuaded investors to pay into his scheme, and he purportedly used investor money to pay off previously ordered restitution,” U.S. Attorney John W. Huber said today. “Once again, we encourage those considering investment opportunities to do their due diligence before handing over their life savings to someone who doesn’t have their interests at heart.”
Nemeckay made a series of representations to investors in connection with the investment offering, including telling them that Mine Shaft was offering Series A Preferred Equity shares totaling $9.4 million and that Mine Shaft had already raised or had sizeable commitments for the funding needed. Investors were told, the indictment alleges, that the minimum investment amount was $20,000 and that the investment would earn 8 percent annual interest. Investors were also told that Mine Shaft would use funds to acquire and develop a brewery in Park City and that the location would produce thousands of barrels of alcohol for distribution. He represented that the location would operate as a restaurant and event center and become a top craft brewer in five years and that investors would receive the first right of refusal on additional investment rounds – among other things.
The indictment alleges Nemeckay issued and sent “investor newsletters” to convince investors to invest and that their investments were succeeding.
In furtherance of the scheme, the indictment alleges Nemeckay also made a variety of other false misrepresentations to investors, including telling them that Mine Shaft was seeking capital to fund the launch of the brewery when, in fact, he was seeking funding for his personal use. The indictment alleges Nemeckay used approximately $1.7 million of Mine Shaft investor funds for his own personal use. Less than $550,000 of investment funds were used toward developing a brewery in Park City and later Santa Clarita.
Interest payments were usually not made to investors, the indictment alleges, and when they were, the payments came from new investor money.
The indictment also alleges Nemeckay reported to investors that he had provided information to the SEC regarding his involvement with Mine Shaft’s fundraising efforts and the SEC had expressed no concern. In fact, he was in violation of State of Utah and federal orders not to participate in the purchase and sale of securities. Nemeckay was the subject of an administrative action with the Utah Division of Securities for selling unregistered securities.
On July 7, 2014, the defendant entered into a Stipulation and Consent Order with the Utah Division of Securities. The sanctions barred Nemeckay from associating with a broker-dealer and from being licensed in any capacity in the securities industry in Utah. It also included a fine of $350,000 with $313,710 offset by restitution to investors.
Nemeckay used Mine Shaft investor funds to pay $312,266.47 in restitution following the sanctions by the Utah Division of Securities.
A summons will be issued for Nemeckay to appear for an initial appearance on the charges. The maximum potential penalty for securities fraud is 25 years in federal prison. The two counts of making false statements to the SEC and the wire fraud count each carry 20-year potential sentences. The potential penalty for money laundering is 10 years.
Indictments are not findings of guilt. Individuals charged in indictments are presumed innocent unless or until proven guilty in court.
Assistant U.S. Attorneys in the U.S. Attorney’s Office are prosecuting the case. Special agents of the Utah Division of Securities and the FBI are investigating the case.
18:1348(1) SECURITIES FRAUD/Securities Fraud; 18:2 Aiding and Abetting; Criminal Forfeiture
(1)
15:78ff(a) REGISTRATION OF NATIONAL SECURITIES EXCHANGE/False Statements to the Securities and Exchange Commission; 18:2 Aiding and Abetting; Criminal Forfeiture
(2-3)
18:1343 FRAUD BY WIRE, RADIO, OR TELEVISION/Wire Fraud; Criminal Forfeiture
(4)
18:1957 FEDERAL STATUTES, OTHER/Money Laundering
(5)
Outcome: The charges set forth in the Indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
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Defendant's Experts:
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