"...from at least 1998 through late 2005, the defendants sold unregistered securities in the form of loan agreements or units in special purpose limited liability companies (LLCs) to raise funds for a variety of entertainment ventures produced and/or promoted by Jack Utsick, the third-largest independent entertainment promoter in the world according to Billboard Magazine. Defendants told prospective investors that their investments would earn annual returns ranging from 15% to 25% and, in some in instances, an additional 3% of the profits generated by Jack Utsick and his companies.

The investments in the LLCs or loan agreements were usually for a term of one year, and many investors rolled over their principle and purported "profits" from project to project. Over the years, defendants raised funds for dozens of projects, including theatrical productions and concerts for well-known artists and groups such as Shania Twain, Elton John, Santana, The Pretenders and Aerosmith. In truth, most of the entertainment projects lost money and, as a result, Utsick and his companies paid earlier investors with funds raised from new investors. The defendants also made material misrepresentations and omissions to investors about, among other things, the profitability of their investments, the use of proceeds, the payment of commissions, and the existence of state disciplinary actions..."