California man faces fraud charges in alleged natural gas business scheme
BEND, Ore. (MCT) – The U.S. Securities and Exchange Commission has filed securities fraud charges against a member of the Confederated Tribes of Warm Springs for allegedly bilking investors of more than $2 million, the agency announced Sept. 13.
The SEC alleges in a federal civil complaint that Deni Leonard, a Harvard University graduate who lives in San Francisco, began taking money from investors in 2003 after providing misleading or false information about a natural gas business he said he had.
Leonard said he would purchase the fuel at a discount price from Canadian Native groups, then resell that gas in the United States at a significant profit, according to the lawsuit.
The charges were filed Sept. 13 with the U.S. District Court in San Francisco.
Attempts to reach Leonard through Warm Spring Ventures, from whom he rented an office, were unsuccessful late Sept. 13.
Leonard, who owns 98.5 percent of Warm Springs-based First Indigenous Depository Co., also acted as the CEO of Indigenous Global Development Corp., or IGDC, before it ceased operation, according to the lawsuit.
The SEC alleges that IGDC exaggerated its involvement in a number of business ventures to attract investors. Those ventures included purchasing natural gas from Canadian Native groups, providing low-cost mortgages and prefabricated homes and distributing pharmaceuticals to American Indian communities.
“Basically, they issued false press releases about the company’s ability to purchase natural gas,” said Erin Schneider, an SEC staff attorney working on the case.
The SEC further alleges that IGDC promoted itself as the first public company majority-owned by American Indians, hyping its progress in providing a better future for those communities.
While it attracted investments, IGDC generated no revenues from the reported ventures and was “teetering on the brink of extinction,” according to the lawsuit.
The complaint said IGDC’s deficit reached more than $14 million by March 2005.
“(IGDC) has never built a power plant, brokered a mortgage, built a home, had any computer consulting clients, or distributed pharmaceuticals,” the complaint said. “Nor has it sold any natural gas with the exception of a one-time sale of approximately $54,500 (for which IGDC was not paid).”
Federal officials said Leonard approached established companies and American Indian groups to get letters of intent expressing interest in potentially working with or investing in IGDC.
Those agreements were then misrepresented to investors as contracts and investment deals, the complaint said.
Jody Calica, secretary/treasurer of the Confederated Tribes of Warm Springs, said he met with Leonard about a year ago.
“He came in to talk to me about pursuing the tribe to invest, but nothing solid came of it,” Calica said. “It never advanced to the stage of formal proposals.”
Calica is unaware of any Warm Spring members who invested in IGDC, but believes that a couple of members do work for Leonard. He declined to comment on the charges against Leonard.
“I just know that he has a lot of good ideas, and he surrounded himself with a lot of good people,” Calica said. “But with the fact that none of these ideas took root, I don’t know whether he had the finances to support those ideas.”
SEC officials said Leonard has 30 days to respond to the charges after being served the papers.
<i>Copyright 2006, The Bulletin, Bend, Ore. Distributed by McClatchy-Tribune Business News.