A venture capital firm and its CEO and co-founder have been charged with defrauding dozens of investors, the Securities and Exchange Commission announced.
In a complaint filed in United States District Court in Georgia, the SEC alleged that 29-year-old George Iakovou and Vika Ventures LLC fraudulently offered and sold over $6 million of securities to at least 46 individual investors in multiple states between 2019 and 2021.
According to the SEC, Iakovou and his company offered to sell investors shares of private companies that might hold an initial public offering but did not actually own the shares at the time of the solicitations and never acquired them. Iakovou is accused of using fraudulent documents and statements to convince investors that Vika Ventures was a successful firm. But instead of buying securities, Iakovou allegedly used the investors’ funds for himself.
The SEC said that Vika Ventures’ other co-founder and Iakovou’s then-girlfriend Penelope Zbravos did not act upon red flags she encountered about the company’s operations. She was alleged to be a negligent participant in the scheme.
“Iakovou and Vika Ventures allegedly operated a straightforward fraud on investors by offering to sell them securities in highly sought-after pre-IPO companies without ever intending to buy any shares on behalf of the investors,” said Carolyn M. Welshhans, Associate Director of the SEC Enforcement Division. “Instead, Iakovou allegedly spent millions of dollars on private jets, expensive watches, and lavish travel.”
Iakovou, Vika Ventures, and Zbravos were charged with violating the antifraud provisions of the federal securities laws. The SEC seeks permanent injunctive relief, disgorgement with prejudgment interest, and civil penalties against Iakovou and Zbravos. Permanent injunctive relief and a civil penalty is being sought against Vika Ventures.
In a parallel action, the U.S. Attorney’s Office for the Middle District of Georgia announced the filing of related criminal charges after a federal grand jury returned an indictment against Iakovou and Zbravos.
Iakovou was charged with one count of conspiracy to commit wire fraud, 17 counts of wire fraud and two counts of engaging in monetary transactions involving criminally derived property. If convicted, he faces a maximum sentence of 20 years in prison for the wire fraud charges and a maximum sentence of 10 years for the monetary transactions involving criminally derived property charges.
Zbravos, 27, is charged with one count of misprision of a felony. If convicted, she faces a maximum sentence of four years in prison.
The attorneys at Lewitas Hyman have decades of experience dealing with securities fraud cases and have a deep understanding of how capital markets and financial service firms are intended to work to protect investors. If you think your financial professional or firm engaged in misconduct that caused you investment losses, contact Lewitas Hyman at (844) 651-2643 or through our online contact form for a no-cost evaluation of your matter.