SEC reaches partial settlements with defendants in Legacy Cares case

The Securities and Exchange Commission has reached partial settlements with all three defendants it charged with defrauding investors in connection with municipal bonds sold to finance construction of an Arizona sports complex.

In April, the SEC charged Randall "Randy" Miller, Chad Miller and Jeffrey De Laveaga with creating false documents that were provided to investors in two municipal bond offerings totaling approximately $284 million. Randy Miller is Chad Miller's father.

The now-defaulted bonds were issued via the Arizona Industrial Development Authority, a conduit issuer, for the benefit of Legacy Cares, a nonprofit corporation, according to the SEC's complaint, filed on April 1 in the U.S. District Court for the Southern District of New York.

In a July 14 letter to U.S. District Judge John G. Koeltl, the SEC asked the court to approve three partial consent judgments jointly proposed by the SEC and the respective defendants.

"The SEC and each of the three defendants have reached partial settlements that would resolve the non-monetary relief that the SEC seeks in this case but leave open for later resolution by motion (or further settlement) the monetary relief sought," the letter said.

While earlier court filings show the SEC and De Laveaga already reached a partial settlement and the judge on May 5 had ordered the clerk to enter a judgment regarding De Laveaga, the new proposed consent judgment for him "conforms the language of his injunctions to that of the two other defendants," the July 14 letter said.

On July 16, the judge ordered judgments against the three to be entered by the clerk, court filings show. Each of those filings said the respective defendants had consented to the judgment's entry.

Each defendant is permanently enjoined from directly or indirectly "participating in the issuance, purchase, offer, or sale of any security; provided, however, that such injunction shall not prevent defendant from purchasing or selling securities for his own personal accounts," the judgment filings show.

In addition, upon the SEC's motion, the court will "determine whether it is appropriate to order disgorgement of ill-gotten gains and/or a civil penalty," the filings said.

Each of the defendants pleaded guilty in a related criminal proceeding, the SEC's July 14 letter indicated.

"The last control date for sentencing is currently set for September 25, 2025," the letter said. "The SEC anticipates that the parties will attempt to negotiate resolutions of the unresolved relief the SEC seeks after the defendants have been sentenced."