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SEC: Wisconsin business owners obtain $52.8M in gemstone scam

The United States Securities and Exchange Commission is taking two Wisconsin business owners to federal court for $52.8 million worth of alleged fraudulent investments involving gemstones, minerals and a now-defunct environmental-remediation company.

The SEC filed a complaint on Monday against Michael Hull of Oconomowoc, Christopher Nohl of Milwaukee and their companies: Bluepoint Investment Counsel, LLC; Chrysalis Financial LLC; and Greenpoint Asset Management II LLC.

The complaint said Hull and Nohl of Milwaukee persuaded 129 investors from 10 states to put nearly $52.8 million into gems, minerals and private companies from 2014 to 2019. Hull and Nohl told investors the fund was safe and would generate high returns and that the investments could be withdrawn as needed, which the SEC alleges were lies. One of the companies’ business plans told buyers: “(d)emand for the finest mineral specimens is spreading like a wild-fire throughout the world and it is imperative to acquire these assets now before truly unique, utterly rare and beautiful things are locked up in private collections completely where they are nearly impossible to acquire. . . . The upper or tip-top of mineral specimens, those being represented by less than 0.0005% of total salable specimens by quality and size, are the most sound investment as possessors get whatever price they demand for the very best in existence and get the same without delay or negotiation. It is truly a seller’s market.”

Financial statements showed just over half of the fund’s value is in gems and minerals and that most of the money was invested in a now-defunct environmental-remediation company. The company was supposed to do oil remediation in Kuwait and said it was in a position to receive a $200 million EPA contract. A financial statement for June 2018 said the fund was worth $135 million, an amount the complaint said was mostly from fake gains.

The complaint said Hull and Nohl used the investors’ money to pay themselves nearly $20 million worth of fees and payments stemming from managing the fund, fake reported gains on the investments and interest on personal loans to the companies.

Hull and Nohl are faced with 12 charges for their actions, and the SEC is requesting the court require them to give up their gains, face appropriate civil penalties and enter an order of permanent injunction to stop Hull, Nohl and their companies from doing similar business in the future.

Bluepoint Investment Counsel, LLC’s certificate of authority has been revoked, and the phone number associated with the company is not in service. Chrysalis Financial has not returned the Wisconsin Law Journal’s call for comment.

About Michaela Paukner, [email protected]

Michaela Paukner is the legal reporter for the Wisconsin Law Journal. She can be reached at (414) 225-1825 or by email at [email protected]

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