SEC allegations levied against Rivera
Published 12:00 am Saturday, July 19, 2008
NATCHEZ — The U.S. Securities and Exchange Commission has filed a complaint against the man who came to Natchez with the promise of a revolutionary biofuel technology.
The complaint names U.S. Sustainable Energy Corp. and its CEO John Rivera as defendants.
The complaint alleges that Rivera issued false or misleading press releases and oral statements about USSEC’s business and technology.
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Some of those allegations say claims Rivera made about patents the company owned or would own were fraudulent. The suit also claims monetary values the company quoted to produce biofuel were false.
The complaint alleges Rivera said it cost USSEC 50 cents a gallon to produce biofuel.
Rivera, who is also listed as chairman and CEO of Sustainable Power Corporation in Baytown, Texas, dismissed the allegations as false and called the SEC’s claims a “witch hunt.”
He claims that a year-and-a-half ago representatives from the SEC were invited to USSEC’s Natchez facility to verify the biofuel production process first hand, but left before the demonstration could be completed.
“They came out there and when they saw what we were doing, they left so they could say they never witnessed it,” Rivera said. “We have certifications from independent laboratories verifying that we are doing everything we stated in those press releases.”
Katherine Addleman, regional director of the SEC’s Atlanta office, said the complaint was filed as a result of careful market analysis conducted by the agency over the past year, as well as input from third party sources.
“Every case is brought about following a thorough investigation conducted by the SEC to ensure that we are not making allegations we believe are unfounded,” she said. “We are alleging that Mr. Rivera was involved in some pretty pervasive fraud in connection with USSEC.”
Other allegations include that Rivera claimed the company had contracts through which it would sell its products, that the company had a fully operational plant and that when USSEC merged with another company its combined technology would be worth $9 to $12 billion.
A third party, Alice M. Price, was named as a relief defendant.
A relief defendant is someone who received goods or assets as a result of the illegal actions of others.
The complaint alleges Price — who reportedly lived with Rivera at the time — profited at least $721,000 by selling USSEC stock at artificially inflated prices after Rivera’s statements and press releases were made public.
The Securities and Exchange Commission wants all of the allegedly ill-gotten funds to be repaid with interest, as well as to ban Rivera from being an officer or director in a company or offering penny stocks.
Rivera first announced his intention to build a biofuel facility at the Adams County Port in February 2006.
In November of that year, he held a demonstration by allegedly powering Vidalia City Hall with a generator running his product.
USSEC bought a warehouse in December 2006, and company officials said the Natchez-based plant was supposed to house 200 fuel reactors, but it apparently never did.
A court date has not yet been scheduled, though Rivera said that he intends to fight the allegations.
“We are not settling,” he said.
A fraud lawsuit was filed by an investor against Rivera in 2007, and that suit is still pending in court.
Josh Hardwick of The North Channel Sentinel in Houston, Texas contributed to this report.