Berkshire Resources, LLC
On June 8th, 2009, in Indiana, the Securities and Exchange Commission (SEC) filed a complaint against Berkshire Resources, LLC and its affiliates. The charges included violations of securities registration and broker-dealer registration. Berkshire offerings appear to have siphoned $15.5 million from investors.
Some investors were told that their Berkshire investment was "foolproof," that they could expect to see returns within 6 to 12 months after recoupment of their initial capital, and that investors could expect near to full recoupment of initial capital within the first year. Berkshire customers may have been enticed to invest in one of the following offerings:
- Berkshire (40L), LLP
- Berkshire 2006-5, LLP
- Passmore-5, LLP
- Gueydan Canal 28-5, LLP
- Gulf Coast Development # 12, LLP
- Drilling Deep in the Louisiana Water, JV
Each of these offerings was purported to exclusively fund oil and gas development projects that Berkshire was to administer. Despite this promise, Berkshire spent $6.7 million on items not related to project development. Most of this sum was spent on ubiquitous items such as payroll, sales commissions, marketing, and promotional expenses.
However, $1.3 million was spent on members of Berkshire's managing family, the Roses. The SEC's investigation states that this money went to pay for such expenses as, "mortgages on… homes, home furnishings, …electronics, cars, plastic surgery, flying lessons, a Kentucky Derby party at Churchill Downs, and personal credit card charges."
Jason Rose, the "managing member" of Berkshire, has been the subject of cease-and-desist orders in both Washington and California in relation to his actions in the securities field. David Rose is alleged to be the de facto "managing member" of Berkshire, and has been party to multiple securities violations. State securities regulators have issued cease-and-desist orders against David Rose in three states – Kentucky, Oklahoma, and Massachusetts. Past charges against him have included fraud, offering unregistered securities, and employing unregistered sales agents. In addition to this, he is awaiting trial on mail and wire fraud charges in connection to two oil and gas well projects in Kentucky.