An Amherst man accused in a federal civil suit of defrauding investors in a hockey facility that he never built also is the target of a criminal probe.
Sources said the U.S. attorney's office is attempting to build a case against Jeffrey J. Coleman, 28, who, the U.S. Securities and Exchange Commission alleges in the civil suit, cheated four investors in his proposed Hockey Barn out of at least $390,000.
Peggy McFarland, a spokeswoman for U.S. Attorney Terrance P. Flynn, said she could not confirm or deny that an investigation was under way.
But Buffalo lawyer Joseph M. LaTona confirmed he has been hired to defend Coleman against possible federal criminal charges. "There is an investigation ongoing; that's all I know," LaTona said.
U.S. District Judge John T. Curtin, meanwhile, froze the assets of Coleman and Hockey Barn LLC on Friday at the SEC's request. Agency lawyers in New York City sought the order via teleconference "to make sure [Coleman] doesn't abscond" with money collected during the alleged scam, said a source familiar with the civil action.
In addition to freezing assets, the order prohibits Coleman and Hockey Barn from further violating securities law, directs them to provide "verified accountings" of assets and prohibits "the destruction, alteration or concealment of documents" pertaining to the case.
A hearing on the temporary order is scheduled July 19.
The SEC claims Coleman dropped the names of the Buffalo Sabres and Coca-Cola Co. to whip up interest in a hockey practice facility he proposed in Amherst and Hockey Barns he claimed he planned to erect in other states.
He purportedly told investors that the Sabres might rent the Amherst arena and that Coca-Cola wanted eventually to buy it to compete against the town's Pepsi Center.
But the plans were a lie, and the name associations were part of the scam, the agency said. It accused Coleman and Hockey Barn of using a fraudulent "roll program" to cheat four people, including a 65-year-old woman and 70-year-old man.
Coleman supposedly told them he planned to pool $1 million from investors to buy U.S. government bonds and then sell them back to the government after 60 days. He falsely claimed the investments would generate a return of 450 to 550 percent, the SEC said.
None of the investors received any profit or got their investments back, the suit claims.
The SEC said it wants the defendants to repay "their ill-gotten gains" plus interest and penalties to the victims.