SEC Charges Three Individuals in $284 Million Arizona Sports Complex Bond Fraud by Legacy Cares
The Securities and Exchange Commission has filed a civil enforcement action against Randall “Randy” Miller, Chad Miller, and Jeffrey De Laveaga for allegedly defrauding investors in two municipal bond offerings that raised $284 million. According to SEC.gov, the SEC claims the three men created and used fabricated documents to support inflated revenue projections tied to the financing of a massive sports and entertainment complex in Mesa, Arizona.
According to the SEC’s complaint, Legacy Cares—a nonprofit entity founded by Randy Miller—issued the municipal bonds in August 2020 and June 2021 through an Arizona state conduit issuer. The proceeds were intended to fund the construction of a large-scale multi-sports park. Investors were told they would receive payments from the revenue generated by the completed complex.
The SEC alleges, however, that the revenue projections provided to investors were based on false or doctored documentation. Specifically, the complaint states that the defendants altered or created letters of intent and service agreements with various sports clubs, leagues, and organizations to falsely suggest that the complex would be heavily utilized.
When the facility opened in January 2022, it fell far short of expectations. Attendance lagged, events were limited, and actual revenue came in tens of millions of dollars below what the projections had forecast. The bonds defaulted by October 2022.
The SEC’s complaint, filed in the U.S. District Court for the Southern District of New York, charges all three defendants with violating antifraud provisions of the federal securities laws. The Commission seeks permanent injunctions, conduct-based injunctions, disgorgement with prejudgment interest, and civil penalties.
In a related action, the U.S. Attorney’s Office for the Southern District of New York has filed criminal charges stemming from the same conduct.
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