Phoenix, Arizona

The Arizona Corporation Commission has ordered Daniel C. Butterfield of Phoenix and his affiliated companies to pay a total of $27.67 million in restitution and $125,000 in administrative penalties for defrauding investors with promissory notes funding a Mexican real estate project. At least 136 investors, mainly residents of Arizona, are affected. Investors warned to “be pessimistic” about getting restitution.

Butterfield and his companies, AZ Investment Property Experts (IPX) and Sandy Beach Esmeralda Development, promoted the investment through advertisements on a Phoenix-area radio station and with seminars. The Commission found, however, that Butterfield failed to disclose that IPX had no ownership interest in the Mexican real estate project. Additionally, the Commission found that Butterfield and his affiliated companies failed to inform investors of the previous revocation of Butterfield's real estate license in Minnesota based upon fraud allegations and failed to disclose the risks of promissory notes funding foreign real estate investments.

The Commission claims of security law violations by Butterfield included the sale of unregistered securities by an unlicensed agent, accepting non-accredited investors, failure to disclose investment risks and “engaging in transactions, practices, or courses of business that operate or would operate as a fraud or deceit upon offerees and investors.”

In settling this matter, Butterfield agreed to the entry of the consent order and admitted to the Commission's findings of security law violations and fraud only for purposes of the administrative proceeding.

For more details on this case, view the full text of the Corporation Commission's order S-21043A-18-0069.

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