SEC Obtains Temporary Asset Freeze and Restraining Order Against Louis Schooler and His Company in $50 Million Fraud Scheme

Securities and Exchange Commission v. Louis V. Schooler and First Financial Planning Corporation d/b/a Western Financial Planning Corporation, Case No. 12 CV 2164 LAB (JMA) (S.D. Cal.).  On September 10, 2012, the SEC announced it obtained an asset freeze against Western Financial Planning Corporation and Louis V. Schooler in a fraud scheme that raised more than $50 million.  The case is about Western and Schooler selling partnership interests that Western had organized to buy vacant land in Nevada and hold for sale at a profit.  Investors were not told that they were paying excessive mark-ups on the land.  Investors were provided comparative prices of purportedly similar land that sold for higher prices than the prices offered by Schooler and Western.  In reality, however, the properties were not comparable to the land sold by Western.  Schooler and Western also did not disclose that the land held by the partnerships was often encumbered by mortgages used to help finance the initial purchase of the land.  Finally, Schooler paid “hush money” to silence investors who discovered they had been defrauded, allowing the scheme to continue.

The SEC charged Western and Schooler with violating Sections 5(a), 5(c), and 17(a) of the Securities Act, and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.  The SEC is seeking preliminary and permanent injunctions, appointment of a permanent receiver, disgorgement of ill-gotten gains with prejudgment interest thereon, and financial penalties, against the defendants.




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