Sweetwater Investments Plead Guilty To $3M Investor Fraud

Dennis Gibb, an investment adviser and the owner/president of Sweetwater Investments Inc., has pleaded guilty to falsification of records and wire fraud. Gibb has also settled parallel civil charges brought by the US Securities and Exchange Commission (SEC) in which part of that deal involves the liquidation of his Sweetwater Income Flood LP Fund.

Gibb set up the private fund in 2008. The year before, he started to solicit prospective investors who were looking for consistent retirement money. The SEC said that between those two years, at least 15 investors put approximately $7.3M in the Sweetwater Income Flood fund.

According to the US Attorney’s Office for the Western District of Washington, Gibb defrauded about 15 investors of over $3M. He touted a sophisticated investment approach that in part involved investing in government bonds with the intent to generate “stable returns.” Meantime, even as Gibb stole investors’ money for his own use, he was telling them that the private fund had $7.8M when, in actuality, it was holding less than $2M.

Gibb is accused of secretly moving over $3.1M of the money that was in the fund to pay for his own expenses and to keep his business running. Meantime, he would send quarterly account statements that were doctored to so as to conceal the investor fraud . Gibb also falsified filings to the SEC to make it seem as if the investment adviser had been audited and that it held more than a billion dollars in assets under management (AUM) when, in fact, its AUM was $73M.

As part of his plea deal, Gibb will forfeit nearly $3.2M and will owe restitution for what he took from investors. The money from the liquidation of the Sweetwater Income Flood fun will go back to the investors who were harmed. Gibb is scheduled to be sentenced later this year.

Even if the investment adviser who defrauded you has pleaded guilty/was convicted in court or has agreed to settle SEC charges, it is still important that you hire an investor fraud lawyer that can help you recover the money you lost. Shepherd Smith Edwards and Kantas, LLP (SSEK Law Firm) works with investors nationwide in fighting for their losses.  Contact SSEK Law Firm today if Dennis Gibb was your investment adviser and you invested in the Sweetwater Income Flood Fund.