The Securities and Exchange Commission today charged two Washington state residents and the two companies they operated with defrauding investors in 15 private investment funds from 2007 to 2018.

The complaint, filed in the United States District Court for the District of Oregon, alleges that Ross C. Miles, 72, of La Center, Washington and his business partner Maureen T. Wile, 70, of Vancouver, Washington fraudulently raised some $15.5 million from investors by claiming that the money raised would be used to purchase real estate receivables, such as mortgages and trust deeds secured by real property. According to the complaint, the defendants also falsely represented that interest payments to investors would come primarily from the interest generated by the receivables and the profits made when the receivables were sold. However, as alleged in the complaint, the defendants never disclosed to investors that the investment funds they managed were insolvent and that they had improperly commingled money among the funds, and used new investor money to make payments to other fund investors in Ponzi-like fashion.

In addition, the complaint alleges that Miles and Wile misappropriated fund assets by making unauthorized payments to themselves and parties related to them, which were reflected as loans in the funds' accounting records. But many of the purported loans allegedly lacked basic documentation such as loan agreements, payment terms and interest rates, and violated the funds' own underwriting standards. About $8.7 million of this money transferred to related parties remains unpaid and owed to the funds.

The SEC's complaint charges Miles, Wile, American Equities and American Eagle Mortgage Management with violating Section 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Without admitting or denying the allegations in the SEC's complaint, Miles, Wile, American Equities and American Eagle Mortgage Management each consented to the entry of an order permanently enjoining them from violating the charged provisions, and authorizing the court to determine at a later date the amount of disgorgement, prejudgment interest, and civil money penalties that each defendant shall pay. Miles and Wile each further consented to the imposition by the court of an officer and director bar.

The SEC's investigation was conducted by Robert J. Durham Jr., Kashya K. Shei and Crystal F. Boodoo, and supervised by Jeremy E. Pendrey of the San Francisco Regional Office. The SEC's litigation will be led by B. Brent Smyth, Mr. Durham and Ms. Shei, and will be supervised by Susan F. LaMarca.