The Securities and Exchange Commission has filed settled charges against Verley Lee “Rocky” Sembritzky, Jr., the promoter of a purported Kenyan desalination plant investment who defrauded American investors out of millions of dollars. Sembritsky, according to the complaint, raised approximately $7.2 million from at least 20 investors in the United States between August 2015 and March 2017, directing investors to send their funds to two entities he controlled – Bounty of the Ocean Inc. and Ocean Harvest LLC.
Sembritzky, a Houston, Texas resident, told investors that he was building an advanced, eco-friendly desalination plant that would provide clean, low-cost drinking water to Kenyans. Sembritzky misled investors as to the viability of his desalination process, falsely assuring them that the technology had years of proven operational history.
The complaint further alleges that Sembritzky also claimed they would reap outsized returns from sales of the lucrative minerals removed during the desalination process.
The complaint alleges that only $650,000 of the $7.2 million raised made it to the project’s bank account. According to the complaint, Sembritzky spent the rest of the money on such personal items as a $2 million condominium for his then-wife, luxury cars, jewelry, and credit card debt.
Without admitting or denying the allegations in the complaint, filed in the U.S. District Court for the Southern District of Texas, Sembritzky consented to an order enjoining him from violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities and Exchange Act of 1934 and Rule 10b-5 thereunder, and the registration provisions of Section 5 of the Securities Act.
Bounty of the Ocean and Ocean Harvest consented to an order enjoining them from violation Sections 17(a)(1) and (3) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.
Sembritzky also consented to a permanent conduct-based injunction that prohibits him from directly or indirectly, including but not limited to, through any entity owned or controlled by him, soliciting or accepting funds from any person or entity for any unregistered offering of securities, and to pay a $192,768 civil penalty.
Sembritzky, Bounty of the Ocean and Ocean Harvest have each agreed to pay, on a joint and several basis, disgorgement of $6,646,132 with prejudgment interest of $911,521.
The SEC’s investigation was conducted by Kimberly Cain and Ty Martinez, with assistance from trial attorney Keefe Bernstein. David Reece and Eric Werner supervised the investigation.