David Allen Harbor charged with defrauding investors
Paradise Valley man operating through multiple Scottsdale-based companies has been charged with misrepresenting investors under alleged payday loan scheme and embezzling a large chunk of the money collected from investors to support its own “lavish lifestyle”.
A grand jury in the U.S. District of Phoenix indicted David Allen Harbor with 22 counts of wire fraud and money laundering, alleging he defrauded investors in Arizona and other states of $ 2.9 million dollars from 2010 to 2015 through a program to expand payday loans to small businesses.
The indictment was filed on July 30 and released to the media on Thursday.
Harbor, 46, was arrested Monday in Paradise Valley. His lawyer did not respond to requests for comment. Harbor has pleaded not guilty to all counts. He risks several years in prison. A trial is scheduled to begin on October 1.
The investigation was conducted by the Internal Revenue Service and the FBI.
Harbor also struck a deal with the Securities and Exchange Commission last year on charges he made false statements to high-end investors to fund a growing Native American lending business.
Promises of high returns
According to the grand jury indictment, Harbor “misrepresented virtually all material aspects of the alleged investment opportunities,” including his background and experience, the amount of money spent on investments, the order in which payments would be received from borrowers and the guaranteed rate would return.
“Investors have been falsely informed that their funds will only be used as short-term loans to small businesses and start-ups,” the indictment reads.
Payday loans are short term loans with high interest rates. Harbor promised returns of 20% and more to potential investors, while saying the loans were not risky as they were extended to a number of companies, according to the indictment.
Lavish sales presentations
Harbor reportedly used a large chunk of the money to support a lifestyle that included extravagant parties, golf club memberships and private chartered jet travel, according to the grand jury statement.
He also spent investor funds on personal credit card and mortgage payments, and paid some earlier investors with funds raised from later investors.
Harbor gave investor presentations at luxury Scottsdale-area golf courses, in a Skybox during Arizona State University football games, in a box at the 16th hole of the Waste Management Phoenix Open, according to the charges. , as well as resorts in Palm Springs, Cabo San Lucas, Mexico, and Harrison, Idaho.
The Harbor companies included Highpointe Capital Group, Nautical Holdings and DCR Hospital Investment, all located at 21020 N. Pima Rd. In Scottsdale.
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