Mine Shaft Brewing and its Principals Charged by SEC with Fraud

The allegedly fraudulent offering raised over $2.7 million from investors.

The SEC charged Utah-based Mine Shaft Brewing and three of its principals with operating an offering fraud that raised over $2.7 million from more than 100 investors.

The SEC alleged that Timothy Andrew Nemeckay, John Allen Logan, and Charles Vernon Whittington told investors that their funds would be used to develop the Mine Shaft Brewery. Mine Shaft Brewery was supposed to include a brewery, restaurant, and retail store. The trio represented to investors that 70% of their funds would be used to acquire brewery and restaurant equipment and purchase a building, with the remaining 30% to be used for inventory and other Mine Shaft business expenses.

Instead, according to the complaint, Nemeckay used his personal LLC as a pass through to pay his personal expenses, including restitution obligations to victims from his prior securities fraud scheme. The complaint alleges that in all, Nemeckay used approximately $1.7 million (63%) of investor funds for his own personal use. The complaint further alleges that, of the remaining investor funds, approximately 10% were used to make Ponzi payments to investors and 10% were used to compensate Whittington and Logan, with less than 17%, used consistently with disclosures to investors.

The SEC’s complaint charges Mine Shaft, Nemeckay, Logan, and Whittington with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b‒5 thereunder, and the registration provisions of Securities Act Sections 5(a) and 5(c). The complaint also charges Nemeckay with violating Section 15(b)(6)(B)(i) of the Exchange Act. The SEC seeks, among other relief, permanent injunctions, a conduct-based injunction, disgorgement of ill-gotten gains plus prejudgment interest thereon, and civil penalties.

The Sonn Law Group is currently investigating allegations surrounding Mine Shaft Brewing. We represent investors in claims against negligent brokers and brokerage firms. If you or your loved one experienced investment losses, we are here to help. For a free consultation, please call us now at 866-827-3202 or complete our contact form.