California Advisor Settles Charges In $71M Fraud

Orange County Register (CA)

May 17--A Laguna Hills-based investment adviser behind the failed startup See Jane Go has settled charges from U.S. government that he plundered millions of dollars from dozens of local investors.

William Michael Jordan, a resident of San Juan Capistrano, was charged by the Securities and Exchange Commission with "perpetrating a multimillion-dollar fraud on his clients," according to a May 15 press release.

Jordan, who had millions of dollars under advisement from more than 100 clients, gained some local fanfare when he and his daughter started a female-only ride-hailing app called See Jane Go. The service, much like Uber, matched female riders and female drivers. The company folded in early January, citing financial trouble.

Jordan could not be reached for comment Thursday.

His firm, William Jordan Investments, and more than 20 related companies or investment funds filed for Chapter 11 bankruptcy in May 2017. The firm estimated its assets at $100,001 to $500,000 with liabilities of $1,000,001 to $10 million.

In August 2017, Jordan was barred from future employment in the securities industry.

Dozens of investors, many of them retired, gave Jordon millions to invest in a variety of business schemes, from growing vegetables vertically in a warehouse to rebuilding a vacant hospital into a senior-living facility. After years waiting for returns on those investments, his clients were left with nothing.

Trabuco Canyon residents Debra Morrell and her husband, Don, invested money with Jordan in 2010 with an eye on paying their daughter's college tuition. After their five-year annuity matured, the couple asked Jordan how they could reinvest $61,911 for one more year.

Jordan, Debra Morrell said, suggested they loan him the money in the form of a promissory note, and he would put it into his TD Opportunity Fund. He told them he would pay 8 percent interest minus 1.5 percent to him and 0.5 percent to Equity Trust, which would hold the money, she said. When the term ended, Jordan stalled, saying he was being audited. They never saw their money again.

"It has been tough and sad that we could not take and enjoy a long retirement vacation at the same time William took his family on a luxury vacation to Costa Rica," Debra Morrell said Thursday, May 17. "Where do you think he got that money? We trusted him completely."

A similar scenario played out repeatedly with clients who shared email exchanges with Jordan in which he tried to temper investor angst with promises of future cash deposits.

"It will take the next year or so for us to liquidate the current assets and show you cash deposits into your account," Jordan wrote to investor Philip Danna of Mission Viejo. "Since we can't tell you about gains until they are in your account in cash you will unfortunately have to be patient."

Danna, a retired elevator technician who invested nearly $900,000 with Jordan dating back to 2003, said he only got cash deposits from Jordan when the tax man came calling.

"We owed Uncle Sam $27k on taxes!" he said Thursday. "You see, the (expletive redacted) was reporting to the IRS that we were making all this money yearly, and we had to pay all these taxes on money we never had or earned."

Danna called Jordan's actions elder abuse. His mother-in-law lost her house investing her life savings in Jordan's funds.

The SEC complaint alleges that, from 2011 until 2016, as he raised more than $71 million from some 100 advisory clients, Jordan lied to those investors about how their funds would be invested, about their investments' performance, and about his own disciplinary history.

Jordan allegedly overstated the value of the assets in several of his 16 private investment funds, then used those inflated values and unrealized "profits" on other investments to overpay management fees and bonuses to himself and his entities, the SEC complaint says. The complaint also alleges the 16 funds were never audited, despite Jordan's promises to investors.

Retirees Lori Fields and her husband invested his American Airlines pension money with Jordan. The money, she said, is just "gone." Her husband died in 2016 before the alleged fraud came to light.

"That was the one time I was glad that he was not here to be a part of this because it would have killed him," she said.

The SEC's complaint charges Jordan with violations of the antifraud provisions under federal securities laws. He settled the action by consenting to a permanent injunction without admitting or denying the SEC allegations.

The amount of disgorgement (illegal profits), interest and civil penalties will be determined by the federal district court in Orange County, the SEC stated.

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