Texas Securities Commissioner Travis J. Iles entered an Emergency Cease and Desist Order to stop David Edward Flake, an entertainer from California, from fraudulently raising money from Texans to produce motorcycle movies.
According to the order, Flake is soliciting Texans to invest money he will purportedly use to produce a series of short movies, referred to as vlogs, of him riding a motorcycle across the country, discovering interesting places and interviewing local residents.
Flake is allegedly telling investors he will upload the movies to YouTube, the movies will attract followers and his visibility will attract advertising revenue. He also claims to have already secured four sponsors, and the sponsorships will generate even more money.
Flake promises lucrative profits to investors—claiming his plan will generate a 48 percent return on investment in just one year.
Not so fast. Flake is not registered to sell securities in Texas. Moreover, the order alleges Flake previously perpetrated similar entertainment schemes, lied to investors and misused their money.
According to the order, the SEC entered an order against Flake in 2015. The SEC found he was raising money for television shows, but instead used investors’ funds to pay commissions to a sales agent and to pay for personal expenses.
Securities regulators from Georgia also filed an action against Flake. They alleged Flake was raising money for movies, but never intended to produce the movies and instead used the money to pay for personal expenses.
The order directs Flake to immediately cease and desist from offering investments in the fraudulent motorcycle movie scheme in Texas. He has 30 days to challenge the accusations.