Washington: Two Indian restaurants in Colorado have defrauded investors of US$380,000, state regulators have alleged, and are now seeking to recover the amount from them.
In a lawsuit, the Colorado Division of Securities alleges that the owners of Indian restaurants Bombay Clay Oven and Saucy Bombay spent US$380,000 invested by shareholders to sell investors on their grand plans for nationwide expansion before " Used half truths and lies." The rent and operating costs are a Ponzi-like payment, local newspaper "BusinessDen" reported on Wednesday.
Both restaurants were owned by The Bombay Group (TBG), which had entered into an agreement with securities broker Michael Bissonnette. Both defendants declined an offer to discuss the allegations with "BusinessDen", the daily reported.
Like many in the restaurant industry, TBG had grand plans to expand its business into a nationwide group with hundreds or even thousands of locations. In 2014, TBG owned and operated two restaurants: Bombay Clay Oven, a restaurant that operated for over two decades, and Saucy Bombay, a new endeavor with a single location in a food court.
The lawsuit states that TBG's plan was to franchise Saucy Bombay to capitalize on the fast-casual restaurant trend.
"The investors in this case really believed in The Bombay Group and their restaurant Saucy Bombay," state securities commissioner Tung Chan told the newspaper. "But as we allege, investors were not told the truth about the investments and were not paid back. If you have invested with TH Bombay Group, please contact the Securities Division immediately," he said.
In a lawsuit, the Colorado Division of Securities alleges that the owners of Indian restaurants Bombay Clay Oven and Saucy Bombay spent US$380,000 invested by shareholders to sell investors on their grand plans for nationwide expansion before " Used half truths and lies." The rent and operating costs are a Ponzi-like payment, local newspaper "BusinessDen" reported on Wednesday.
Both restaurants were owned by The Bombay Group (TBG), which had entered into an agreement with securities broker Michael Bissonnette. Both defendants declined an offer to discuss the allegations with "BusinessDen", the daily reported.
Like many in the restaurant industry, TBG had grand plans to expand its business into a nationwide group with hundreds or even thousands of locations. In 2014, TBG owned and operated two restaurants: Bombay Clay Oven, a restaurant that operated for over two decades, and Saucy Bombay, a new endeavor with a single location in a food court.
The lawsuit states that TBG's plan was to franchise Saucy Bombay to capitalize on the fast-casual restaurant trend.
"The investors in this case really believed in The Bombay Group and their restaurant Saucy Bombay," state securities commissioner Tung Chan told the newspaper. "But as we allege, investors were not told the truth about the investments and were not paid back. If you have invested with TH Bombay Group, please contact the Securities Division immediately," he said.
