Family accused of selling shares of Ohio gold mine

By Michael P. Tremoglie | Jul 19, 2012

PORTLAND, Ore. (Legal Newsline) - The Securities and Exchange Commission has charged a father, son and daughter with running an investment scam.

They fraudulently sold investors fantastic returns from an Ohio gold mining operation they said would yield more than $11 billion, the SEC said Tuesday.

The SEC alleges that Harry Dean Proudfoot III, of Mt. Vernon, Ohio, and his children, Matthew Dale Proudfoot of Colbert, Wash., and Laurie Anne Vrvilo of Tigard, Ore., raised at least $2.7 million from approximately 140 investors in 23 states through their Portland-based company 3 Eagles Research & Development LLC.

They allegedly deceived investors that gold would be mined from gravel pits in central Ohio. They promised a return on investment of 35 times, the SEC says.

According to the SEC's complaint, the scheme occurred primarily between September 2009 and October 2011. The Proudfoots allegedly said they had an expert geologist on the mining project. They allegedly solicited, using a fraudulent Power Point presentation and unregistered securities broker Dennis Ashley Bukantis of Denver, who earned nearly $165,000 in commissions. Bukantis is charged along with the Proudfoots in the SEC's complaint.

The SEC alleges that rather than using investor funds for gold mining equipment and operations, the Proudfoots siphoned off more than $1.1 million of investor money and misused 3 Eagles corporate accounts as their own personal piggy bank, leaving the company penniless and unable to pay the necessary expenses to get the Ohio mine into production. Among their illicit personal expenditures, the Proudfoots spent $80,000 on automobiles, $235,000 in personal travel, and upwards of $30,000 per year for vitamins and nutritional supplements, the SEC claim.

Harry Proudfoot was removed from the company and 3 Eagles represented it stopped selling royalty units after being served investigative subpoenas by the SEC and various state securities regulators in the fall of 2011, the SEC said.

However, by December, the SEC said Matthew Proudfoot was once again selling a stake in 3 Eagles. Once again, much of the investor money was misused for personal expenses, the SEC says.

The SEC's complaint charges the defendants with violations of the Securities Act of 1933 and 1934. The complaint also charges Bukantis with acting as an unregistered broker in violation of Section15 (a) of the Exchange Act. The complaint seeks permanent injunctions, disgorgement with prejudgment interest and civil monetary penalties.

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