Washington, D.C.--(Newsfile Corp. - August 10, 2016) - The Securities and Exchange Commission today charged Merrill Robertson
Jr., a former player for the Philadelphia Eagles, with defrauding investors, including coaches he knew from his time playing
football for the Fork Union Military Academy and the University of Virginia.
The SEC’s complaint, filed in federal court in Richmond, Virginia, charges Robertson, Sherman C. Vaughn Jr., and the company
they co-owned, Cavalier Union Investments LLC. According to the complaint, the defendants promised to invest in diversified
holdings but diverted nearly $6 million of the more than $10 million they raised from investors to pay for personal expenses and
used other funds to repay earlier investors.
Robertson and Vaughn, both of Chesterfield, Virginia, are alleged to have lied about the unregistered debt securities they sold,
saying they would yield as much as 20 percent “while providing safety and security for our investors.” According to the
complaint, the defendants claimed that Cavalier had investment funds operated by experienced investment advisers when it did not
have any funds or investment advisers and was functionally insolvent shortly after it was formed. The defendants allegedly
hid this fact from potential investors and relied on cash from new investors to stay afloat. The complaint further alleges
that Cavalier’s only investments were in restaurants that had all failed by 2014, something the defendants never disclosed as they
continued soliciting and accepting investors’ money. The scheme allegedly targeted seniors and coaches, donors, alumni, and
employees of schools Robertson had attended.
“Our complaint alleges that Robertson and Vaughn preyed on elderly victims and others who placed their trust in these
individuals, only to have their savings stolen,” said Sharon B. Binger, Director of the SEC’s Philadelphia Regional Office.
“We will continue to aggressively pursue fraudsters who exploit their relationship of trust with victims and promise returns that
appear to be too good to be true.”
The SEC encourages investors to check the backgrounds of people selling them investments. A quick search on
the SEC’s investor.gov website would have shown that Robertson and Vaughn are not
registered to sell securities.
In a parallel action, the U.S. Attorney’s Office for the Eastern District of Virginia today announced criminal charges against
Robertson.
The SEC’s complaint charges Robertson, Vaughn, and Cavalier with violations of the antifraud and registration provisions of the
federal securities laws and seeks permanent injunctions, return of allegedly ill-gotten gains with prejudgment interest, and civil
penalties.
The SEC’s investigation, which is continuing, has been conducted by Lawrence D. Parrish, Dustin Ruta, and Kingdon Kase of the
Philadelphia Office, and was supervised by G. Jeffrey Boujoukos. The SEC’s litigation will be led by David L. Axelrod and
John V. Donnelly. The SEC appreciates the assistance of the U.S. Attorney’s Office for the Eastern District of Virginia and
the Federal Bureau of Investigation.