Jeffrey J. Coleman dropped names like the Buffalo Sabres and Coca-Cola Co. to whip up interest in a hockey practice facility that he was going to build in Amherst, according to the U.S. Securities and Exchange Commission.
But the proposed Hockey Barn was a fiction, and the name associations were part of a scam that cheated investors out of at least $390,000, the SEC charged in a suit filed Tuesday in U.S. District Court.
The civil action accuses Coleman, 28, of Amherst and Hockey Barn of using a fraudulent "roll program" to cheat four people, including a 65-year-old woman and 70-year-old man, and demands that the defendants "disgorge their ill-gotten gains," plus interest and penalties.
According to the SEC, Coleman began soliciting investors last fall, telling them he planned to develop hockey facilities in New York, Florida and other states.
The 70-year-old man, for example, was told that $1 million would be raised from an investor group and pooled to buy U.S. government bonds, which would be sold back to the government after 60 days. Coleman, the SEC said, falsely claimed the investments would generate a return of 450 percent to 550 percent.
Coleman also told the unidentified man that the Sabres were interested in using the proposed Hockey Barn in Amherst as a practice facility and that Coca-Cola was interested in buying the structure within three to four years to compete with Amherst's Pepsi Center.
Shortly afterward, the man gave Coleman $40,000 in exchange for promissory notes.
Court papers allege that Coleman claimed the "first roll" of bond purchases yielded a profit of more than $7.8 million, leading some investors to give him even more money.
But none of them ever saw a nickel of profit or got their investments back despite Coleman's promises, the SEC said. A $25,000 personal check Coleman sent to the 65-year-old woman's son before flying off to Italy in April bounced, it says.
The defendant's plans to build hockey facilities "were without any reasonable basis," and he "has not taken any significant steps to build or develop any hockey facilities," the SEC claimed.
"Further . . . the Buffalo Sabres never committed to using a Hockey Barn" and "the Coca Cola Company never agreed to purchase a Hockey Barn," the agency added.
State records list Hockey Barn as a limited liability corporation located at 206 Imperial Drive, Amherst, and Coleman as its chief executive officer.
Local directories have no listing for either.