A Peoria man has been ordered to pay $4.7 million in restitution after the Arizona Corporation Commission found he was selling unregistered investment contracts.
The Investigation showed that Jad Morris, 44-year-old, Peoria resident since 1994, had sold contracts to about 400 investors through his three companies, despite not having been registered by the Arizona Corporation Commission (ACC) as a securities salesperson. The three companies that he did business dealings from were Financial Leverage LLC, IQBiz Financial LLC and IQBiz Funding LLC.
Morris was sentenced with the financial penalty on June 28, which includes an extra $200,000 fine.
According to ACC records, Morris sold investors an investment in a call center that would purportedly find customers to put in the investors’ downlines for multi-level marketing companies.
Morris reportedly used a business funding platform with his clients, which provides small businesses with funding through the process of helping them build and acquire credit. In addition, he used software to allow the clients to apply for multiple credit cards simultaneously in order to reduce the impact on their credit score.
Morris used the platform’s portal to convince potential investors to invest with him and his companies.
“In some cases when an investor didn’t already have business credit and debt, Morris would tell investors to use personal credit cards to invest with him right away, and then create a business entity and use the (business funding platform) to obtain business credit to pay off the personal credit cards and ‘not need to pay back (the business loans/credit cards) personally,’” ACC records stated.
Investors are personally liable for their business loans, however Morris did not disclose this to them.
“After convincing them to invest, Morris would receive wire transfers from investors or directly charge their credit cards, mostly through IQBiz Financial or Financial Leverage,” the records further stated. “Morris would then provide falsified invoices to investors for various business consulting services, which Morris claimed was so investors could use the invoices for tax write offs.”
Records show that Morris then used those investments for personal uses.
On Oct. 21, 2022, the ACC issued a temporary cease and desist against Morris and his companies.
Although after that he continued. Morris offered to give investors’ funds to a “friend” to trade on their behalf, making it so Morris and his investors would split the profit. Records show that Morris accepted a loan from another investor after the temporary cease and desist.
Morris did not either admit or deny the allegations brought to him by the ACC and has agreed to pay $372,000 toward the close to $4.7 million restitution order.