San Juan Capistrano Company Accused Of Investment Fraud: COURT

SAN JUAN CAPISTRANO, CA—The assets of a San Juan Capistrano-based company and its founder have been frozen for allegedly carrying out investment fraud, it was announced Monday. The U.S. Securities and Exchange Commission obtained an emergency court order to freeze accounts on Monday.

Justin Robert King and his company, Elevate Investments LLC, raised about $7.4 million from investors since at least June 2019, according to the SEC's complaint, unsealed last week in Santa Ana federal court.

The complaint alleges that King and Elevate offered interests in the Elevate Investment Fund, though the fund never existed. According to the complaint, all investor money was held in brokerage and bank accounts in the name of King, his wife, and/or Elevate.

As alleged, Elevate's website stated that, from June 2019 through June 2020, King's trading resulted in returns of 61 percent for all his clients' accounts, according to the SEC.

King's trading across all known accounts associated with him resulted in losses of $3.8 million during that period, documents say. The website allegedly stated that King had historically generated profits for his clients year after year. Still, the complaint says that King consistently generated losses.

Elevate's website allegedly made false statements about its affiliations with well-known securities industry participants when, in fact, certain purported affiliations had been terminated by the securities industry participant or had never existed. According to the SEC, from September to December, King allegedly transferred almost $400,000 from the brokerage accounts to his wife's bank account, who is named in the complaint as a relief defendant.

On Dec. 28, a federal judge in Santa Ana granted the SEC's request for a temporary restraining order against King and Elevate. The court's order freezes the assets of King, Elevate, and Justin King's wife, Shannon, appoints a temporary receiver over Elevate, and orders the Kings and Elevate to provide an accounting, among other relief.

The court set a Jan. 19 hearing on the SEC's motion for a preliminary injunction extending the emergency relief through the case's conclusion.

City News Service, Ashley Ludwig contributed to this report.