The two top executives of green technology firm Enviro Board have been charged with defrauding investors of $6 million by making bogus financial projections for a building materials product.
The U.S. Securities and Exchange Commission said co-chairmen/CEOs Glenn Camp, 59, and William Peiffer, 62, predicted Enviro Board would earn from $18 million to $95 million per year even though its technology for recycling agricultural waste fiber into low-cost, environmentally-friendly building materials had a “protracted history of commercial failure.”
California-based Enviro Board raised $6 million from investors between 2011 and 2014. According to the SEC, $2 million of the proceeds went toward Camp and Peiffer’s compensation while another $540,000 was paid to their primary salesman Joshua Mosshart, who is also named as a defendant in a civil complaint.
“We allege that Enviro Board appealed to investors’ desires to benefit the environment by creating the false impression that it was on the cusp of lucrative operations,” Michele Wein Layne, director of the SEC’s Los Angeles regional office, said in a news release. “But Camp and Peiffer were merely lining their own pockets while their unviable manufacturing process has failed to commercialize after nearly 20 years of trying.”
Enviro Board was formed in 1997 to develop E-Board, a low-cost, environmentally-friendly building panel recycled from straw and other agricultural waste fiber. It planned to build a fiber extrusion mill to manufacture the product.
By the end of 2011, the SEC said, the company had failed to “design and construct a mill capable of commercial manufacturing operations,” but in offering materials for investors from about February 2011 to January 2012 Camp and Peiffer projected about $42.8 million in revenue and $30.8 million in net income during Enviro Board’s first year of operation.
Those and subsequent profit projections were “fraudulent, false and misleading,” the SEC said, and the executives also duped investors by claiming to have secured $161 million in financing from a “vendor” that had actually been created by Peiffer and lacked the resources to actually make such a loan.