A Mesa company, Archimedes Foundation Trust Group and multiple other respondents have been order by the Arizona Corporation Commission to stop promoting an offshore trading program and to pay restitution and administrative penalties for bilking investors out of $450,000.
The Corporation Commission found that respondents Archimedes Foundation Trust Group, David Hart, Kirk Koskella (aka Kirk James), Conrad Defriese and Wolfgang Kovacek offered and sold unregistered investment contracts and promissory notes issued by Archimedes Foundation Trust Group within or from Arizona to six investors. However, the respondents were not registered to offer or sell securities in Arizona. The investors have not received any investment returns or a return of their $450,000 principal investment.
The Corporation Commission ordered the respondents to pay the following:
- Hart and his spouse to pay, jointly and severally with Archimedes, restitution in the principal amount of $450,000 and a $50,000 administrative penalty. Archimedes is also ordered to pay a $50,000 administrative penalty.
- Tucker and her spouse to pay, jointly and severally with Archimedes and Hart, $450,000 in restitution and a $50,000 administrative penalty.
- Koskella and his spouse to pay, jointly and severally with Archimedes, Hart, and Tucker, $405,000 in restitution; Koskella and his spouse to pay a $75,000 administrative penalty
- Defriese to pay, jointly and severally with Archimedes, Hart, Tucker, and Koskella, restitution in the principal amount of $345,000 and a $15,000 administrative penalty.
- Kovacek to pay, jointly and severally with Archimedes, Hart, Tucker, and Koskella, $60,000 in restitution and a $10,000 administrative penalty.
The Corporation Commission found that Koskella, using the name Kirk James, fraudulently claimed to be an attorney and the “legal advisor” of Archimedes Foundation Trust Group. Additionally, the Commission found Archimedes, Hart, Koskella, Defriese, and Kovacek made misrepresentations and/or omissions of material facts, including failing to disclose to at least two of the investors Koskella’s federal criminal conviction and permanent injunction from the Securities and Exchange Commission (SEC) for fraudulently selling $500 million in corporate revenue bonds that the Koskella knew were worthless.
Also, the Corporation Commission found that, as signers on Archimedes’ business account, Hart and Tucker misused a portion of the investor’s funds for personal expenses not related to the Archimedes investment program.