Couple Ordered to Pay in Alleged Scam

A U.S. District Court judge has ordered two individuals to repay nearly $500,000 they allegedly collected in a Newport Beach investment scam.

Judge Dickran Tevrizian ordered Michael A. Todd and his wife, Kim J. Brown, to pay a total of $488,917, which they received from the sale of shares in Casino Cruise Corp. and BRW Leasing Inc.

The judge also ordered them to pay a civil penalty of $110,000 each, according to the Securities and Exchange Commission.

The court previously entered a judgment barring Todd and Brown from violating U.S. securities laws in the future.

Todd, the former director of Casino Cruise, and Brown, former secretary of Casino Cruise, consented to the order without admitting or denying the allegations.

Also named in the SEC’s complaint, filed last August, were: Jerry L. Aubrey, Gary J. McCrory, and Calvin J. Calvin, all of Newport Beach; Gary L. Cleverly of Laguna Beach; and Todd J. Taylor.

In its complaint, the SEC alleged that the defendants sold shares of the two companies by promoting a fictitious cruise ship with gambling facilities that would operate between Los Angeles and Ensenada, Mexico.

Led by Todd and Brown, the defendants raised $908,000 from 120 investors, the SEC alleged. Contrary to what investors were told, the SEC alleged, Todd and Brown took most of the investor funds for themselves and attempted to hide their involvement in these businesses, claiming that others were operating the companies.

The SEC alleged that Aubrey, McCrory, Cleverly, Calvin and Taylor worked as sales agents soliciting investors to purchase shares in Casino Cruise and BRW Leasing in a boiler-room type operation based in Newport Beach.

The court also entered judgments against these five defendants finding that they all failed to register with the agency as brokers. It ordered them to pay a civil penalty of $5,500 each and barred them from violating U.S. securities laws in the future.

All the defendants, according to SEC regional trial counsel James A. Howell, were not represented by counsel. Reached at his home, Calvin J. Calvin had no comment.

None of the other defendants could be reached for comment.