A Georgia investment manager stole half of $2.4 million he raised for a fund, part of which was supposed to pay for a high-performance submarine, the Securities and Exchange Commission said in a complaint released Tuesday.
Timothy S. Batchelor is charged with fraud for using nearly a quarter of a million dollars in investor funds to purchase new vehicles and about $225,000 to pay student loans. He also allegedly transferred thousands of dollars in investor funds to other family members, the SEC says.
Batchelor, of Alpharetta, Ga., raised $2.4 million for a fund called Specter Ventures Fund II, which held military contracts, including one for the high-performance submarine vessel, the SEC said. He raised the money from three individuals and an institutional investor in late 2014 and in 2015. Half of the money was used by Specter to support its investment goals and the other half was stolen by Batchelor, the SEC said.
Each investor was provided with a subscription agreement and private placement agreement that was drafted primarily based on information provided by Batchelor. Information provided to the investors said their money would be used in various businesses related to national security. Batchelor was never registered with the SEC during the time he served as principal for the firm that managed the fund, a firm headquartered in Atlanta that has since been dissolved.
Batchelor tried to cover his tracks by belatedly fabricating a document in November 2015 describing the unauthorized expenditures as a "loan" to himself that was supposedly made in February 2015, according to the SEC.