Two northern Colorado companies that solicited more than $2.1 million from at least 43 people, telling them they were investing in a professional tour sponsored by golf great Arnold Palmer, were accused of securities fraud in a civil complaint filed last month by the Colorado Division of Securities.
and his company C.H.A.M.P. Financial Group, and Fort Collins-based National Professional Golf Tour, which is controlled by El Paso, Texas-resident Lawrence Lunsford, allegedly told victims they could expect a 10 to 15 percent return, as well as quarterly dividend and royalty payments on their unregistered promissory notes, according to the civil court complaint.
Some of the victims were elderly and knew Pebley through church or his work at Primerica Financial, which sold life insurance and other investment products, the complaint said. One victim invested $145,000 and was promised a 20 percent return, another put in $150,000 and was promised a 10 percent return within six months..
According to state securities commissioner Gerald Rome, Lunsford formed NPGT in 2009 intending to produce professional golf events with a network of paying members, but needed $250,000 in start-up money to qualify as a golf tour. Lunsford hired C.H.A.M.P, to raise the money, Rome said in a news release. From August 2010 to May 2012, the defendants raised more than $2.1 million.
According to the complaint, the victims were told that the investment was very low risk because the tour was “sponsored” by Palmer. The investors also were told that they could expect complete repayment of their principal.
Some victims received small payments — none cited in the complaint received more than $1,200 . Most of the money was transferred into an operating account for NPGT and used for the business and personal expenses of Pebley and Lunsford, the complaint alleges. When the investors asked about their money, they received a letter claiming NPGT had “experienced difficulties due to rapid growth, but that Lunsford and Pebley were working to secure a buyer for the tour.” Eventually, the men stopped returning the victim’s phone calls and e-mails.
C.H.A.M.P was not a registered broker-dealer firm, the complaint says, and Pebley operated as an unlicensed sales representative.
“To investors who were already clients or associates of Mr. Pebley, I’m sure a golf tour backed by a celebrity athlete seemed like a sure bet,” Rome said in a news release. “However, the first red flag for any investor should be that guarantee of high returns with low risk. At minimum that should prompt a prospective investor to run a free license check with us, which would reveal whether the promoter was properly licensed.”
The civic complaint seeks injunctive relief and restitution on behalf of the 43 known investors.
