SEC Charges Repeat Securities Law Violator with New Offering Fraud

The Securities and Exchange Commission (SEC) has brought charges against Marshall E. Melton, a Greensboro, North Carolina resident, and his company, Integrated Consulting & Management, LLC. The charges pertain to an alleged fraudulent investment scheme that primarily targeted elderly investors. Melton has a previous history with the SEC, having been accused of securities fraud and misappropriation of investor assets in 1997.

The SEC’s legal complaint, submitted to the United States District Court for the Middle District of North Carolina, Greensboro Division, alleges that Melton deceived seven investors into investing between $1.03 to $1.49 million in what he portrayed as a real estate development venture in Laurinburg, North Carolina. This alleged fraud spanned from March 2016 to at least April 2021. The investors involved, six of whom were aged between nearly 60 and just over 86 with an average age of 75 at the time of investment, were promised returns from the renovation and subsequent rental or sale of dilapidated properties in Laurinburg.

However, according to the SEC, Melton barely used the investment funds for the stated purposes. While he did purchase seven properties in Laurinburg, the SEC contends that he did little to develop them, instead misappropriating nearly two-thirds of the investors’ money for personal use. The SEC further alleges that in April 2021, Melton handed over the ownership of five properties to two disgruntled investors in exchange for dropping their claims against him. In this process, Melton allegedly misled two other investors into giving up their stakes in those properties, under false promises which he later failed to fulfill.

The SEC has charged Melton and his company with violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934, along with Rule 10b-5 thereunder. The SEC is seeking permanent injunctive relief, disgorgement of illicit profits with prejudgment interest, and civil penalties against each defendant. Additionally, the SEC is requesting a conduct-based injunction against Melton, which would permanently restrict him from being involved in the issuance, purchase, offer, or sale of any security, apart from his own personal accounts.

The SEC’s inquiry was managed by Micheal D. Watson, aided by Jerome DeWitt, and overseen by Stephen E. Donahue and Justin C. Jeffries, all based in the SEC’s Atlanta Regional Office. Robert Schroeder will lead the ensuing litigation, under the supervision of M. Graham Loomis. The SEC has acknowledged the support from the North Carolina Secretary of State, Securities Division in this matter.