SEC Alleges Empire Racing Stables Used in Ponzi Scheme

In federal charges alleged by the Securities and Exchange Commission, Jason Dodd Bullard and Angela Romero-Bullard are accused of misappropriating investors' money into their Empire Racing Stables operation as well as other businesses they owned.

The Securities and Exchange Commission announced Aug. 31 that it filed an emergency action and obtained a temporary restraining order and an asset freeze to stop an alleged Ponzi scheme perpetrated by Shakopee, Minn., residents Bullard and Romero-Bullard and the entity they control, Bullard Enterprises. 

The SEC also named four relief defendants in the action—entities controlled by Bullard and Romero-Bullard that received investor funds from the alleged scheme.

According to the SEC complaint filed in the United States District Court for the District of Minnesota, from at least 2007-21 the defendants raised approximately $17.6 million from as many as 200 investors in Bullard Enterprises' purported Flagship and Platinum Funds. Bullard and Romero-Bullard allegedly told investors—most of whom were friends and family, including many elderly retirees—that their investments would be used to trade foreign currencies. Bullard Enterprises allegedly sent investors account statements showing that their accounts were increasing in value. 

In reality, according to the SEC complaint, Bullard Enterprises stopped trading in foreign currencies in 2015, and the defendants simply used new investor money to pay purported "returns" to existing investors. Also according to the complaint, Bullard, 57, and Romero-Bullard, 49, misappropriated investors' money to support other businesses they owned, including the horse racing stable, as well as a limousine service, and health and fitness studio.

"Many of the investor-victims in this case were friends and family of Bullard and Romero-Bullard who trusted their promises about investment strategy and expected returns," said Nekia Hackworth Jones, director of the SEC's Atlanta regional office. "As alleged in the complaint, Bullard and Romero-Bullard breached that trust for years. Instead of delivering on their promises, these individuals used false statements and fraudulent documents to convince investors to pour millions of dollars into bank accounts used almost exclusively for Ponzi-style payments and for their personal benefit."

According to the SEC, Empire Racing Stables was founded in 2015 and lists its office address as the couple's home address. Bullard is listed as Empire Racing's manager and registered agent. 

Empire Racing Stable currently is considered an inactive corporation with the state of Minnesota, according to the SEC, because it failed to file its corporate renewal by Dec. 31, 2019. Still, it's been active this season. Through Aug. 30 Empire Racing Stables has won 34 races and its horses have earned $599,227 in purses this season. Since its launch the stable has won 146 races and earned more than $2.42 million in purses.

SEC Alleges Empire Racing Stables Used in Ponzi Scheme
Photo: Coady Photography

Racing at Canterbury Park

The stable has offered partnerships to the public. A promotion on its still-active website notes that Bullard has 24 horses.

Bullard's attorney, Randy Sparling, confirmed that Bullard and Bullard Enterprises have been subject to civil enforcement actions claiming violations of federal securities laws. Despite that, Sparling anticipates that the racing stable will be able to continue to operate.

"The SEC, in the action, sought emergency relief and in part that was granted by order of the court today," Sparling said in an email. "A receiver has been appointed by the order of the court. 

"Such appointment includes the assets of Empire Racing Stables. We anticipate the receiver will allow the business to continue to be operated in its ordinary course to preserve the value of its horses while the matters related to the claims against Mr. Bullard and Bullard Enterprises are resolved."

Bloomberg Law reported the SEC's court filing Aug. 30.

The SEC complaint charges the defendants with violating antifraud provisions of federal securities laws. In addition to temporary relief, the complaint seeks, among other things, preliminary and permanent injunctions, disgorgement, prejudgment interest, civil penalties, and an asset freeze.

The SEC filing with the district court alleges that on June 1 an investor requested to withdraw $100,000 from his account that listed his personal balance at $317,588. The SEC alleges, however, that the money across all Bullard Enterprises accounts was only $49,607 and only $106,713 across all bank accounts owned by Bullard and Romero-Bullard.

The SEC's ongoing investigation is being conducted by enforcement staff in the Atlanta regional office.