Denver-area Indian restaurant duped investors out of $380K, state says
State regulators say {that a} native Indian restaurant with one location used “half-truths and lies” to promote traders on its grandiose plans for a nationwide growth earlier than spending the $380,000 that shareholders invested on hire, working prices and Ponzi-like funds.
Via a pair of lawsuits it filed April 16, the Colorado Division of Securities is looking for to recuperate misplaced investor money from The Bombay Group and securities dealer Michael Bissonnette. Each defendants declined provides to debate the allegations with BusinessDen.
Bombay Clay Oven opened in Highlands Ranch within the early Nineties earlier than shifting to Cherry Creek in 1997, the place it occupied 165 Steele St. for 22 years till closing in 2019.
Bombay’s house owners, Marshall and Rohini Miranda, additionally ran a fast-casual offshoot referred to as Saucy Bombay at Republic Plaza downtown within the 2010s, till the meals courtroom it was in closed in 2015. It’s Saucy Bombay that has drawn the scrutiny of state investigators as of late.
In 2014, whereas each of their Bombay eating places have been nonetheless open, the Mirandas allegedly employed Michael Bissonnette, an investor and marketer in Longmont, to pitch traders on the concept of a Saucy Bombay empire that may start with 140 franchises in 11 western states earlier than increasing east and probably come to incorporate 1000’s of areas, à la Chipotle.
In keeping with final week’s lawsuits, an funding in Saucy Bombay was framed as one of the best of all worlds: “A protected and conservative funding,” within the phrases of the Mirandas, that would yield returns as excessive as 2,900%, with assured dividends of 8% quarterly.
After the only real Saucy Bombay location closed on the finish of 2015, Bissonnette and Marshall Miranda didn’t inform traders and continued speaking in regards to the restaurant as if it was open, in keeping with the Division of Securities. Because of this, 17 individuals — 16 Coloradans and one different — invested $380,000 in Saucy Bombay’s father or mother firm, The Bombay Group.
The cash trickled into The Bombay Group’s checking account all through 2015 and 2016. Financial institution information obtained by investigators allegedly present that it was then used to pay property taxes, working prices and hire at Bombay Clay Oven. The Bombay Group additionally paid itself a $34,500 fee for promoting its personal inventory, in keeping with the Division of Securities.
No income was deposited into the checking account, solely funding capital, the division stated.
“Thus, any quantities paid to an investor weren’t ‘dividends’ of revenues, however a compensation from their very own funding or the investments of others,” final week’s lawsuits declare.
By the top of 2016, the checking account was almost empty and no funds have been despatched to traders since. The Mirandas opened a Saucy Bombay throughout from East Excessive Faculty at 2616 E. Colfax Ave. in 2018; it stays the one and solely Saucy Bombay location.
“Of the seventeen traders, none acquired a dividend, not to mention a quarterly dividend,” the lawsuits allege. “The Bombay Group couldn’t pay a dividend as a result of The Bombay Group was not worthwhile. The plan to franchise Saucy Bombay merely by no means materialized.”
The Division of Securities is suing Bissonnette, his Bissonnette Advisor Group, The Bombay Group and Marshall Miranda for allegedly violating state securities legal guidelines by deceptive traders, promoting unregistered securities and, in Bissonnette’s case, promoting with no license.
Reached by telephone final week, Bissonnette stated he was unaware of the lawsuit. After a BusinessDen reporter despatched him a replica of it, he stopped answering his telephone.
Speaking with a reporter at Saucy Bombay on Thursday, Marshall Miranda stated that he, too, was unaware of the lawsuit, although he knew the Division of Securities had been investigating. Miranda stated that he would want to speak together with his attorneys earlier than discussing the matter. He didn’t reply follow-up telephone calls looking for remark after that.
“The traders on this case actually believed in The Bombay Group and their restaurant Saucy Bombay,” stated Tung Chan, the state’s securities commissioner. “However as we allege, the traders weren’t instructed the reality in regards to the investments and so they haven’t been paid again. If in case you have invested with The Bombay Group, please contact the Securities Division immediately.”
This story was reported by our associate BusinessDen.
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