A complaint from the Securities and Exchange Commission accuses executives of an Irvine, Calif.-based solar-panel company and three of its executives of improperly using funds from investors.
The SEC alleges that Nanotech Engineering Chief Financial Officer Michael Hatton, CEO David Sweaney, Chief Operating Officer Jeffery Gange, and affiliated entities diverted more than $2.4 million of investor funds for Maseratis, cosmetic surgery, and other items and services. According to the complaint, the company has âdubious claims of a patent-pending invention that would change the world: the allegedly revolutionary âNanopanelâ solar panel.â
Nanotech didnât respond to multiple requests by email and phone to make Hatton, Sweaney, and Gange available to comment. It couldnât be determined who their legal representatives were.
The agency also alleges that Hatton is a pseudonym being used by Michael James Sweaney and that David Sweaney is his nephew.
According to the SEC, this Michael Sweaney pleaded guilty in 1998 to one count of felony securities fraud in Nevada state court, was ordered to pay restitution to 10 investors, and was sentenced to a 12- to 32-month prison sentence, suspended in favor of two years of probation. The complaint charged that although Hatton hid his true identity from Nanotech investors, he listed his legal name âon multiple Nanotech bank forms.â
From September 2017 to at least Oct. 22, 2019, Nanotechâs bank records show it has raised at least $9.4 million from investors, with one investor alone apparently accounting for $2 million. Nanotech âemployed numerous âsales agentsâ (actually unlicensed stockbrokers being paid on a commission basis) in a âboiler-roomâ-type environment,â the agency said.
Hatton allegedly spent $208,500 of Nanotech funds to buy a 46-foot Sea Ray yacht named âBella Vita,â Italian for âGood Life.â The SEC also charges he spent $39,549 for cosmetic surgery and $3,440 for dentistry using money from Nanotech funds.
David Sweaney allegedly used Nanotech funds for $9,754 in cosmetic surgery, $37,557 in dentistry, and at least $18,600 in luxury fashion goods, including items from Keringâs Gucci and Louis Vuitton.
The SEC declined to say whether the cosmetic surgery and dentistry was for the defendants themselves or other parties.
COO Gange allegedly used more than $100,000 in Nanotech funds to buy two Maserati sports cars.
Also, Hatton directly transferred $301,550 from investor funds, while David Sweaney transferred $133,926, and Gange transferred $63,315.58, the complaint said.
The SEC charged that the defendants also spent more than $100,000 of investor funds on âobviously non-business items,â such as vaping products.
The SEC filed the civil complaint Dec. 5. On Wednesday, Dec. 11, the agency said it obtained a temporary restraining order and asset freeze against Nanotech and the three men.
The SEC said the investigation is continuing.
Nanotechâs site says it has a ânew way to create energy.â The company says it is developing solar panels âthe size of a FedEx Envelopeâ by âlayering sheets of Graphene as a substructureâ with âa Carbon Nanotube Forest over the top, with our proprietary mineral solution.â A video on Nanotechâs site features an unnamed spokesman saying, âItâs simply not possibleâ that a competitor can make a better product. Nanotechâs site doesnât name its officers, but it says that Karl Eiesenhammer is an advisor to the company; attempts to reach Eiesenhammer were unsuccessful.
Inside Scoop is a regular Barronâs feature covering stock transactions by corporate executives and board membersâso-called insidersâas well as large shareholders, politicians, and other prominent figures. Due to their insider status, these investors are required to disclose stock trades with the Securities and Exchange Commission or other regulatory groups. Inside Scoop also reports on SEC complaints.