One-time entertainment promoter David Elliott Rosen of Austin was sentenced to 10 years to prison on May 4 for for a nearly $2 million fraud based on the sale of investments in his concert-promotion business.
Rosen pleaded guilty to securities fraud in Travis County State District Court. He was ordered to pay restitution of $1.8 million.
Rosen was indicted in 2015 on securities fraud, theft, and money laundering charges resulting from his sale of investment contracts and promissory notes in a “Concert Investment Program.” Rosen operated businesses under the names Rozone Productions LLC and Illuminated Entertainment Group LLC.
Rosen told investors he would use their money to secure specific musicians for concerts.
Rosen said he was trying to raise money for concerts featuring Justin Bieber, the Eagles, and the Black Eyed Peas, among other big names.
There were no concerts featuring those artists. Investors' money was supposed to go into a third-party escrow account and would be refunded if the concerts didn't happen.
Rosen ultimately used much of investors' money to pay his personal expenses.
Rosen sold the securities without disclosing that previous investors in the concert investment program did not receive the returns that were promised to them.
Rosen also misrepresented to investors that he would use their money to secure specific music artists and to fund the general operational expenses of his concert promotion businesses.
Individuals and companies made separate investments in the concert investment program of between $7,000 and $200,000 in 2009 and 2010. Some made multiple investments.
Rosen also pleaded guilty to an Information alleging theft by deception for an unrelated investment fraud. He was sentenced to 10 years in state prison and ordered to pay restitution of $809,000. The sentences will run concurrently.
Rozone Productions, Illuminated Entertainment, and Rosen filed for liquidation in the Bankruptcy Court for the Western District of Texas in 2010.
Attorneys in the Enforcement Division of the Texas State Securities Board prosecuted Rosen in conjunction with the Travis County District Attorney's Office.