ACC Votes to Close Civil Case After Collecting Over $19 million for Defrauded Investors

Phoenix, Ariz. - The Arizona Corporation Commission (ACC) approved a request to terminate the Maricopa County Superior Court case of Arizona Corporation Commission v. Densco Investment Corporation (Densco) after recovering almost $19.7 million owed to investors.

In 2016, the Commission filed a complaint against Denso for violations of multiple sections of the Arizona Securities Act, seeking appointment of a receiver to manage Densco affairs following the sudden death of Densco's owner and sole operator. Densco had raised over $40,000,000 from investors, all of which was loaned to real estate ventures. The investors were told that the maximum loan-to-value ratio was 70% and the loans were protected by first deeds of trust. This information turned out to be false. Some loans were at or exceeding 100% loan-to-value and some of the properties were not even secured with a deed of trust.

During the claims process, the Receiver identified 113 investors who were owed $31,446,001. Through coordinated efforts, the Commission and the Receiver successfully recovered $19,788,384 for the distribution to the investors. Additionally, the Commission is assigned a criminal restitution order for $16,946,384 for collection and distribution to investors. At this time, investors have had more than 63% of their losses returned to them.

All documents relating to this agenda item can be found in the Maricopa County Superior Court online docket at https://www.superiorcourt.maricopa.gov/docket/CivilCourtCases/ and entering case no. CV2016-014142.

For further questions regarding this matter, contact the Investigator on Duty at the Arizona Corporation Commission's Securities Division at 602-542-0662, or email [email protected].