SEC v. NATIVE AMERICAN ENERGY GROUP, INC.; JOSEPH D’ARRIGO; and DAVID HUDZIK, No. 1:23-cv-04455, Eastern District of New York (June 16, 2023) — Complaint

ANTONIA M. APPS
REGIONAL DIRECTOR
Sheldon L. Pollock
Gerald Gross
Preethi Krishnamurthy
Christine D. Ely
Benjamin S. Mishkin
Attorneys for Plaintiff
SECURITIES AND EXCHANGE COMMISSION
New York Regional Office
100 Pearl Street
Suite 20-100
New York, NY 10004-2616
(212) 336-0116 (Krishnamurthy)
[email protected]

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK

SECURITIES AND EXCHANGE
COMMISSION,

                                             Plaintiff,

                        -against-

NATIVE AMERICAN ENERGY GROUP, INC.,
JOSEPH D’ARRIGO, and DAVID HUDZIK,

                                             Defendants,

                         -and-

LISA D’ARRIGO and LORRAINE ALEJANDRO,

                                             Relief Defendants.

COMPLAINT

23 Civ. 4455 (       )

JURY TRIAL DEMANDED

Plaintiff Securities and Exchange Commission (“Commission”), for its Complaint against
Defendants Native American Energy Group, Inc. (“Native American Energy”), Joseph D’Arrigo
(“D’Arrigo”), and David Hudzik (“  Hudzik”) (collectively, “Defendants ”) and Relief Defendants Lisa
D’Arrigo (“Lisa”) and Lorraine Alejandro (“Alejandro”) (collectively, “Relief Defendants”), alleges
as follows:

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SUMMARY
1. Between October 2014 and August 2020, Defendants made material
misrepresentations to investors when offering Native American Energy common stock and
unlawfully offered and sold the stock without a registration statement which was required under the
federal securities laws.  During that period, Native American Energy raised at least $3.43 million
from at least 100 investors across the country.
2. Defendants solicited investors with a misleading subscription agreement that
described the subscription as an “investment in the Company.”  In reality, D’Arrigo, the Chief
Executive Officer of Native American Energy, and the company’s stock salespersons pocketed
approximately 70 percent of the funds raised from investors.
3. Additionally, Hudzik, a consultant for the company from January 2017 through
December 2018, falsely told investors that he would only receive a commission on any profits
earned after an investor sold their Native American Energy shares.  In fact, Hudzik received
commissions of 20 to 30 percent within days of the investments he sold.  The commission payments
were delivered to Hudzik’s romantic partner, Relief Defendant Alejandro.
4. D’Arrigo also misappropriated approximately $958,500 in investor proceeds for his
personal benefit, using the proceeds to withdraw cash for himself, to wire money to himself and his
wife, Relief Defendant Lisa, to pay personal credit card bills, and to make numerous purchases at
restaurants, gas stations, grocery stores, drug stores, and other retailers.
5. Defendants also violated registration provisions of the securities laws.  Defendants
offered and sold Native American Energy common stock to investors when no registration
statement was in effect and no exemption from registration applied.  Moreover, Hudzik acted as an
unregistered broker because, among other things, he solicited investors, provided them subscription
agreements and wiring instructions, and received transaction-based compensation (compensation

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based on the amount of money he raised from investors).
VIOLATIONS
6. By virtue of the foregoing conduct and as alleged further herein, Defendants Native
American Energy, D’Arrigo, and Hudzik have violated Sections 5(a) and (c) and 17(a) of the
Securities Act of 1933 (“Securities Act”) [15 U.S.C. §§ 77e(a), 77e(c), and 77q(a)], Section 10(b) of
the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78j(b)], and Rule 10b-5
thereunder [17 C.F.R. § 240.10b-5], and Hudzik has also violated Section 15(a) of the Exchange Act
[15 U.S.C. § 78o(a)].
7. Unless Defendants are restrained and enjoined, they will engage in the acts, practices,
transactions, and courses of business set forth in this Complaint or in acts, practices, transactions,
and courses of business of similar type and object.
NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT
8. The Commission brings this action pursuant to the authority conferred upon it by
Securities Act Sections 20(b) and 20(d) [15 U.S.C. §§ 77t(b) and 77t(d)] and Exchange Act Section
21(d) [15 U.S.C. § 78u(d)].
9. The Commission seeks a final judgment: (a) permanently enjoining Defendants from
violating the federal securities laws and rules this Complaint alleges they have violated; (b) ordering
Defendants to disgorge all ill-gotten gains they received as a result of the violations alleged herein
and to pay prejudgment interest thereon, pursuant to Exchange Act Sections 21(d)(3), 21(d)(5), and
21(d)(7) [15 U.S.C. §§ 78u(d)(3), 78u(d)(5), and 78u(d)(7)]; (c) ordering Defendants to pay civil
money penalties pursuant to Securities Act Section 20(d) [15 U.S.C. § 77t(d)] and Exchange Act
Section 21(d)(3) [15 U.S.C. § 78u(d)(3)]; (d) permanently prohibiting D’Arrigo and Hudzik from
serving as an officer or director of any company that has a class of securities registered under
Exchange Act Section 12 [15 U.S.C. § 78l] or that is required to file reports under Exchange Act

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Section 15(d) [15 U.S.C. § 78o(d)], pursuant to Securities Act Section 20(e) [15 U.S.C. § 77t(e)] and
Exchange Act Section 21(d)(2) [15 U.S.C. § 78u(d)(2)]; (e) permanently prohibiting D’Arrigo and
Hudzik from participating in any offering of a penny stock, pursuant to Securities Act Section 20(g)
[15 U.S.C. § 77t(g)] and Exchange Act Section 21(d)(6) [15 U.S.C. § 78u(d)(6)]; (f) ordering Relief
Defendants to pay, with prejudgment interest, all ill-gotten gains by which they were unjustly
enriched, pursuant to Exchange Act Sections 21(d)(3), 21(d)(5), and 21(d)(7) [15 U.S.C. §§ 78u(d)(3),
78u(d)(5), and 78u(d)(7)]; and (g) ordering any other and further relief the Court may deem just and
proper.
JURISDICTION AND VENUE
10. This Court has jurisdiction over this action pursuant to Securities Act Section 22(a)
[15 U.S.C. § 77v(a)] and Exchange Act Section 27 [15 U.S.C. § 78aa].
11. Defendants, directly and indirectly, have made use of the means or instrumentalities
of interstate commerce or of the mails in connection with the transactions, acts, practices, and
courses of business alleged herein.
12. Venue lies in this District under Securities Act Section 22(a) [15 U.S.C. § 77v(a)] and
Exchange Act Section 27 [15 U.S.C. § 78aa].  Defendants may be found in, are inhabitants of, or
transact business in the Eastern District of  New York, and certain of  the acts, practices,
transactions, and courses of  business alleged in this Complaint occurred within this District,
including Defendants’ solicitation of  investors.  For example, Hudzik, a resident of this District,
solicited investors, including investors who also reside in this District, in person and by telephone,
email, and text message from this District.
DEFENDANTS
13. Native American Energy, formed in 2005, is a Delaware corporation with its
principal place of business in Queens, New York.  The company describes itself as “an energy

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resource development and management company.”  Native American Energy purportedly had active
field operations on the Fort Peck Indian Reservation in Montana from 2005 to 2013 and, from 2008
to 2011, sold oil from five wells that it operated to Shell Trading (US) Company.  Native American
Energy’s alleged well operations ceased in or around 2013.  Since then, the company has not had any
business operations and has not generated any revenue.  In 2020, the Connecticut Banking
Commissioner issued an order imposing a $100,000 fine upon Native American Energy for violating
the antifraud provisions in Section 36b-4(a) of the Connecticut Uniform Securities Act.
14. D’Arrigo, age 61, is a resident of East Stroudsburg, Pennsylvania.  D’Arrigo has
served as the Chief Executive Officer and a Director of Native American Energy since 2005.  He is
a co-founder of the company.  Between August and December 1999 and again between March 2004
and July 2005, D’Arrigo was a registered representative at Commission-registered broker-dealers and
held Series 7 and 63 securities licenses.  In 2020, the Connecticut Banking Commissioner issued an
order imposing a $100,000 fine upon D’Arrigo for violating the antifraud provisions in Section 36b-
4(a) of the Connecticut Uniform Securities Act.
15. Hudzik, age 49, is a resident of East Meadow, New York.  Hudzik worked as a
consultant for Native American Energy from January 2017 through December 2018.  Between July
1996 and July 2016, Hudzik was a registered representative at a series of Commission-registered
broker-dealers and held Series 7 and 63 securities licenses.  Hudzik has not been registered as an
associated person with a broker-dealer since July 2016 and has never himself been registered with
the Commission as a broker-dealer or in any other capacity.
RELIEF DEFENDANTS
16. Lisa, age 60, is a resident of East Stroudsburg, Pennsylvania, and is D’Arrigo’s wife.
At D’Arrigo’s direction, Lisa received approximately $32,700 in investor proceeds from Native
American Energy.

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17. Alejandro, age 46, is a resident of East Meadow, New York, and is Hudzik’s
romantic partner.  At Hudzik’s request, D’Arrigo directed that Native American Energy transfer
approximately $70,000 in investor proceeds to Alejandro.
FACTS
I. DEFENDANTS OFFERED AND SOLD NATIVE AMERICAN ENERGY
COMMON STOCK.
18. Although Native American Energy effectively ended its business operations in or
around 2013, the company continued to solicit investors to purchase its common stock and, in so
doing, raised at least $3.43 million from at least 100 investors across the country between October
2014 and August 2020 (the “Relevant Period”).
19. Among other things, during the Relevant Period, t he company, through D’Arrigo,
hired several formerly licensed registered representatives, including Hudzik, to identify and solicit
investors.
20. D’Arrigo, Hudzik, and the other stock salespersons solicited investors in person and
by telephone, email, and text message.
21. To purchase shares of Native American Energy common stock, investors provided
funds to the company by check or wire.
22. Investors also completed a subscription agreement in which they, among other
things, warranted their status as an “accredited investor.”
23. Pursuant to Rule 501 of Regulation D under the Securities Act [17 C.F.R. § 230.501],
an accredited investor is someone who: (i) has a net worth over $1 million, excluding primary
residence (individually or with a spouse or partner); (ii) has an income over $200,000 (individually)
or $300,000 (with a spouse or partner) in each of the prior two years, and reasonably expects the
same income level in the current year; (iii) holds in good standing a Series 7, 65, or 82 securities
license; (iv) is a director, executive officer, or general partner of the company selling the securities

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(or of a general partner of that company); (v) is a “family client” of a “family office” that qualifies as
an accredited investor; or (vi) for investments in a private fund, is a “knowledgeable employee” of
the fund.
24. During the Relevant Period, Native American Energy and its representatives did not
limit their solicitations to individuals who they believed would qualify as accredited investors.
25. The company and its representatives also did not take any steps to verify investors’
accreditation.
26. In addition to not verifying investors’ accreditation, there was no registration
statement with the Commission in effect in connection with the company’s offers and sales of
common stock.
27. Moreover, no valid exemption from registration existed with respect to the
company’s offers and sales of its common stock.
28. Further, the company and its representatives did not disclose to investors that Native
American Energy’s Chief Financial Officer is subject to an order of the Commission entered in 2005
pursuant to Exchange Act Section 15(b) [15 U.S.C. § 78o(b)], which permanently bars him from
association with any broker or dealer.
29. During the Relevant Period, Native American Energy did not have any sources of
income other than money raised from investors.
30. During the Relevant Period, D’Arrigo also transferred to himself and Lisa, withdrew
in cash, and spent on personal expenses approximately $958,500 in investor proceeds, representing
approximately 2 8 percent of the total amount raised from investors, as described in more detail
below in Section III.
31. D’Arrigo transferred an additional approximately $1.46 million to the company’s
stock salespersons, representing more than 42 percent of the total amount raised from investors.

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II. DEFENDANTS MADE MATERIAL MISREPRESENTATIONS TO
INVESTORS.

A. Defendants Solicited Investors with a Misleading Subscription Agreement.
32. The subscription agreement Defendants provided to investors contained false and
misleading statements regarding the use of investor proceeds.
33. The subscription agreement described the subscription as an “investment in the
Company.”
34. Yet the subscription agreement did not disclose that the majority of investor
proceeds—approximately 70 percent—would be used to compensate D’Arrigo and the company’s
stock salespersons.
35. Indeed, investors were unaware that their investments would largely be used to pay
D’Arrigo and the company’s stock salespersons.
36. Investors instead believed that their investments would be used to fund company
operations and development.
37. D’Arrigo and Hudzik provided the subscription agreement to investors, along with
wiring instructions to pay for the shares purchased.
38. D’Arrigo also provided the subscription agreement to the company’s stock
salespersons for use in soliciting investors.
39. In addition, D’Arrigo approved the subscription agreement’s use and signed it on
behalf of the company.
40. D’Arrigo knew or recklessly disregarded that: (i) the subscription agreement
misleadingly described the subscription as an “investment in the Company”; (ii) the majority of
investor proceeds would be used to pay himself and the company’s stock salespersons; and (iii)
investors were unaware of those payments.
41. Hudzik likewise knew or recklessly disregarded that the subscription agreement was

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misleading, as he knew or recklessly disregarded that he would receive a large portion of the
investments he sold and that investors were unaware their investments would be used in that
manner.
B. Hudzik Deceived Investors Regarding His Commissions.

42. In 2017 and 2018, Hudzik solicited friends, acquaintances, and family members to
purchase shares of Native American Energy common stock and, in so doing, discussed the merits of
the investment with them.
43. For example, Hudzik told investors that Native American Energy was pursuing
several projects and potential acquisitions that would make the company more valuable and that its
stock price would ultimately increase from $0.10 per share to $2.00 or more per share.
44. During that period, Hudzik was not registered with the Commission as a broker or
dealer or associated with a registered broker or dealer.
45. Hudzik generally received a commission of 20 to 30 percent on the investments he
sold, including the following investments:
 Date of Investment
Amount
Invested
Date(s) of
Commission Payment
Commission
Amount
Commission
Percentage
February 9, 2017 $25,000
February 10, 2017
February 13, 2017
$6,250 25%
February 22, 2017 $50,000 February 23-24, 2017 $12,500 25%
March 13, 2017 $25,000
March 14, 2017
March 16, 2017
$6,250 25%
June 22, 2017 $5,000 June 26, 2017 $1,500 30%
July 6, 2017 $50,000 July 10, 2017 $15,000 30%
November 21, 2017 $5,000 November 22, 2017 $1,000 20%
November 28, 2017 $5,000 December 1, 2017 $1,500 30%
December 15, 2017 $5,000 December 18, 2017 $1,000 20%
December 18, 2017 $2,500 December 20, 2017 $500 20%
January 24, 2018 $25,000 February 6, 2018 $5,000 20%

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 Date of Investment
Amount
Invested
Date(s) of
Commission Payment
Commission
Amount
Commission
Percentage
March 6, 2018 $25,000 March 7, 2018 $5,000 20%
April 11, 2018 $10,000 April 17, 2018 $2,000 20%
May 22, 2018 $25,000 May 25, 2018 $5,000 20%
June 26, 2018 $25,000
June 27, 2018
June 29, 2018
$7,500 30%
TOTAL $282,500  $70,000 ~24.8%
46. Each commission payment—$70,000 in total—was delivered to Hudzik’s romantic
partner, Alejandro, as Hudzik purportedly did not have any bank account at the time.
47. Alejandro did not provide any consideration in return for receiving these
commission payments.
48. Neither Hudzik nor the subscription agreement he provided to investors disclosed
that he would receive these commissions.
49. Instead, Hudzik falsely told most investors he solicited that he would only receive a
commission on any profits earned after the investor sold their Native American Energy shares on
the open market.
50. Hudzik told one investor that he would receive an up-front commission, but did not
disclose the percentage.
51. For other investors, Hudzik did not say anything about commissions.
52. When Hudzik solicited investors to purchase shares of Native American Energy
common stock, he knew or recklessly disregarded that he would receive the above-described
commissions and that investors were unaware of those commissions.
III. D’ARRIGO MISAPPROPRIATED INVESTOR PROCEEDS.
53. During the Relevant Period, Native American Energy had two bank accounts in its
name, and both of them received investor proceeds.  D’Arrigo alone controlled those accounts.

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54. Drawing upon that authority, D’Arrigo misappropriated approximately $958,500 in
investor proceeds for his personal use during the Relevant Period.
55. Specifically, D’Arrigo transferred to himself, or withdrew in cash, approximately
$860,300.
56. D’Arrigo also transferred approximately $32,700 to his wife, Lisa.
57. Lisa did not provide any consideration in exchange for her receipt of these funds.
58. In addition, D’Arrigo used approximately $65,500 to pay personal credit card bills
and to make numerous purchases at restaurants, gas stations, grocery stores, drug stores, and other
retailers, including TJ Maxx, Ulta Beauty, Target, Home Depot, Walmart, Big Lots, Men’s
Wearhouse, and Cohen’s Fashion Optical.
59. D’Arrigo knew or recklessly disregarded that he was engaged in manipulative,
deceptive, and fraudulent conduct by, among other things, soliciting investors with a misleading
subscription agreement that described the subscription as an “investment in the Company,”
transferring investor proceeds to himself and Lisa, withdrawing investor proceeds in cash, and
spending investor proceeds on personal expenses.
FIRST CLAIM FOR RELIEF
Violations of Securities Act Section 17(a)
(All Defendants)
60. The Commission re-alleges and incorporates by reference here the allegations in
paragraphs 1 through 59.
61. Defendants, directly or indirectly, singly or in concert, in the offer or sale of
securities and by the use of the means or instruments of transportation or communication in
interstate commerce or the mails, (1) knowingly or recklessly have employed one or more devices,
schemes or artifices to defraud, (2) knowingly, recklessly, or negligently have obtained money or
property by means of one or more untrue statements of a material fact or omissions of a material

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fact necessary in order to make the statements made, in light of the circumstances under which they
were made, not misleading, and/or (3) knowingly, recklessly, or negligently have engaged in one or
more transactions, practices, or courses of business which operated or would operate as a fraud or
deceit upon the purchaser.
62. By reason of the foregoing, Defendants, directly or indirectly, singly or in concert,
have violated and, unless enjoined, will again violate Securities Act Section 17(a) [15 U.S.C. § 77q(a)].
SECOND CLAIM FOR RELIEF
Violations of Exchange Act Section 10(b) and Rule 10b-5 Thereunder
(All Defendants)
63. The Commission re-alleges and incorporates by reference here the allegations in
paragraphs 1 through 59.
64. Defendants, directly or indirectly, singly or in concert, in connection with the
purchase or sale of securities and by the use of means or instrumentalities of interstate commerce, or
the mails, or the facilities of a national securities exchange, knowingly or recklessly have (i) employed
one or more devices, schemes, or artifices to defraud, (ii) made one or more untrue statements of a
material fact or omitted to state one or more material facts necessary in order to make the
statements made, in light of the circumstances under which they were made, not misleading, and/or
(iii) engaged in one or more acts, practices, or courses of business which operated or would operate
as a fraud or deceit upon other persons.
65. By reason of the foregoing, Defendants, directly or indirectly, singly or in concert,
have violated and, unless enjoined, will again violate Exchange Act Section 10(b) [15 U.S.C. § 78j(b)]
and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].
THIRD CLAIM FOR RELIEF
Violations of Securities Act Sections 5(a) and (c)
(All Defendants)
66. The Commission re-alleges and incorporates by reference here the allegations in

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paragraphs 1 through 29, paragraph 3 2, paragraphs 37 through 39, paragraphs 42 through 45,
paragraphs 48 through 51, and paragraph 53.
67. Defendants, directly or indirectly, singly or in concert, (i) made use of means or
instruments of transportation or communication in interstate commerce or of the mails to sell,
through the use or medium of a prospectus or otherwise, securities as to which no registration
statement was in effect; (ii) for the purpose of sale or for delivery after sale, carried or caused to be
carried through the mails or in interstate commerce, by any means or instruments of transportation,
securities as to which no registration statement was in effect; or (iii) made use of means or
instruments of transportation or communication in interstate commerce or of the mails to offer to
sell or offer to buy, through the use or medium of a prospectus or otherwise, securities as to which
no registration statement had been filed.
68. By reason of the foregoing, Defendants violated and, unless enjoined, will again
violate, Securities Act Sections 5(a) and 5(c) [15 U.S.C. §§ 77e(a) and 77e(c)].
FOURTH CLAIM FOR RELIEF
Violations of Exchange Act Section 15(a)
(Hudzik)
69. The Commission re-alleges and incorporates by reference here the allegations in
paragraphs 1 through 3, paragraphs 5 through 28, paragraphs 31 through 37, and paragraphs 41
through 52.
70. Hudzik, as a natural person not associated with a broker or dealer which is a person
other than a natural person, made use of the mails or any means or instrumentality of interstate
commerce to effect transactions in, or to induce or attempt to induce the purchase or sale of, any
security without being registered with the Commission as a broker-dealer.
71. By reason of the foregoing, Hudzik violated, and, unless enjoined, will again violate
Exchange Act Section 15(a) [15 U.S.C. § 78o(a)].

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FIFTH CLAIM FOR RELIEF
Unjust Enrichment
(Relief Defendants)
72. The Commission re-alleges and incorporates by reference here the allegations in
paragraphs 1 through 59.
73. Lisa and Alejandro received approximately $32,700 and $70,000, respectively, in
investor proceeds from Native American Energy.
74. Relief Defendants have no legitimate claim to these ill-gotten gains.
75. Relief Defendants obtained the funds under circumstances in which it is not just,
equitable, or conscionable for them to retain the funds.
76. Relief Defendants have therefore been unjustly enriched.
PRAYER FOR RELIEF
 WHEREFORE, the Commission respectfully requests that the Court enter a Final
Judgment:
I.
Permanently enjoining Native American Energy and its agents, servants, employees and
attorneys and all persons in active concert or participation with any of them from violating, directly
or indirectly, Securities Act Sections 5(a) and (c) and 17(a) [15 U.S.C. §§ 77e(a), 77e(c), and 77q(a)],
Exchange Act Section 10(b) [15 U.S.C. § 78j(b)], and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5];
II.
Permanently enjoining D’Arrigo and his agents, servants, employees and attorneys and all
persons in active concert or participation with any of them from violating, directly or indirectly,
Securities Act Sections 5(a) and (c) and 17(a) [15 U.S.C. §§ 77e(a), 77e(c), and 77q(a)], Exchange Act
Section 10(b) [15 U.S.C. § 78j(b)], and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5];

15
III.
Permanently enjoining Hudzik and his agents, servants, employees and attorneys and all
persons in active concert or participation with any of them from violating, directly or indirectly,
Securities Act Sections 5(a) and (c) and 17(a) [15 U.S.C. §§ 77e(a), 77e(c), and 77q(a)], Exchange Act
Sections 10(b) and 15(a) [15 U.S.C. §§ 78j(b) and 78o(a)], and Rule 10b-5 thereunder [17 C.F.R.
§ 240.10b-5];
IV.
Ordering Defendants and Relief Defendants to disgorge all ill-gotten gains they received
directly or indirectly, with prejudgment interest thereon, as a result of the alleged violations,
pursuant to Exchange Act Sections 21(d)(3), 21(d)(5), and 21(d)(7) [15 U.S.C. §§ 78u(d)(3),
78u(d)(5), and 78u(d)(7)];
V.
Ordering Defendants to pay civil monetary penalties under Securities Act Section 20(d)
[15 U.S.C. § 77t(d)] and Exchange Act Section 21(d)(3) [15 U.S.C. § 78u(d)(3)];
VI.
Permanently prohibiting D’Arrigo and Hudzik from serving as an officer or director of any
company that has a class of securities registered under Exchange Act Section 12 [15 U.S.C. § 78l] or
that is required to file reports under Exchange Act Section 15(d) [15 U.S.C. § 78o(d)], pursuant to
Securities Act Section 20(e) [15 U.S.C. § 77t(e)] and Exchange Act Section 21(d)(2) [15 U.S.C.
§ 78u(d)(2)];
VII.
Permanently prohibiting D’Arrigo and Hudzik from participating in any offering of a penny
stock, including engaging in activities with a broker, dealer, or issuer for purposes of issuing, trading,
or inducing or attempting to induce the purchase or sale of any penny stock, under Exchange Act

Section 21(d)(6) [15 U.S.C § 78u(d)(6)];
VIII.
Granting any other and further relief this Court may deem just and proper.
JURY DEMAND
The Commission demands a trial by jury.
Dated: New York, New York
June 16, 2023
REGIONAL DIRECTOR
Sheldon L. Pollock
Gerald Gross
Preethi Krishnamurthy
Orristine D. Ely
Benjamin S. Mishkin
Attorneys for Plaintiff
SECURITIES AND EXG-IANGE COMMISSION
New York Regional Office
100 Pearl Street
Suite 20-100
New York, NY 10004-2616
(212) 336-0116 (Krishnamurthy)
[email protected]
16

ANTONIA M. APPS 
REGIONAL DIRECTOR 
Sheldon L. Pollock 
Gerald Gross 
Preethi Krishnamurthy 
Christine D. Ely 
Benjamin S. Mishkin 
Attorneys for Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 
New York Regional Office 
100 Pearl Street  
Suite 20-100 
New York, NY 10004-2616 
(212) 336-0116 (Krishnamurthy) 
[email protected]  
 
UNITED STATES DISTRICT COURT 
EASTERN DISTRICT OF NEW YORK 
 
SECURITIES AND EXCHANGE 
COMMISSION, 
 
                                             Plaintiff, 
 
                        -against- 
 
NATIVE AMERICAN ENERGY GROUP, INC., 
JOSEPH D’ARRIGO, and DAVID HUDZIK,    
  
                                             Defendants,  
 
                         -and- 
 
LISA D’ARRIGO and LORRAINE ALEJANDRO,  
 
                                             Relief Defendants. 
 

 
 
COMPLAINT 

   
23 Civ. 4455 (       ) 

 
   

JURY TRIAL DEMANDED 
  

           
          

 
Plaintiff Securities and Exchange Commission (“Commission”), for its Complaint against 

Defendants Native American Energy Group, Inc. (“Native American Energy”), Joseph D’Arrigo 

(“D’Arrigo”), and David Hudzik (“Hudzik”) (collectively, “Defendants”) and Relief Defendants Lisa 

D’Arrigo (“Lisa”) and Lorraine Alejandro (“Alejandro”) (collectively, “Relief Defendants”), alleges 

as follows: 

Case 1:23-cv-04455   Document 1   Filed 06/16/23   Page 1 of 16 PageID #: 1



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SUMMARY 

1. Between October 2014 and August 2020, Defendants made material 

misrepresentations to investors when offering Native American Energy common stock and 

unlawfully offered and sold the stock without a registration statement which was required under the 

federal securities laws.  During that period, Native American Energy raised at least $3.43 million 

from at least 100 investors across the country.   

2. Defendants solicited investors with a misleading subscription agreement that 

described the subscription as an “investment in the Company.”  In reality, D’Arrigo, the Chief 

Executive Officer of Native American Energy, and the company’s stock salespersons pocketed 

approximately 70 percent of the funds raised from investors. 

3. Additionally, Hudzik, a consultant for the company from January 2017 through 

December 2018, falsely told investors that he would only receive a commission on any profits 

earned after an investor sold their Native American Energy shares.  In fact, Hudzik received 

commissions of 20 to 30 percent within days of the investments he sold.  The commission payments 

were delivered to Hudzik’s romantic partner, Relief Defendant Alejandro.   

4. D’Arrigo also misappropriated approximately $958,500 in investor proceeds for his 

personal benefit, using the proceeds to withdraw cash for himself, to wire money to himself and his 

wife, Relief Defendant Lisa, to pay personal credit card bills, and to make numerous purchases at 

restaurants, gas stations, grocery stores, drug stores, and other retailers.   

5. Defendants also violated registration provisions of the securities laws.  Defendants 

offered and sold Native American Energy common stock to investors when no registration 

statement was in effect and no exemption from registration applied.  Moreover, Hudzik acted as an 

unregistered broker because, among other things, he solicited investors, provided them subscription 

agreements and wiring instructions, and received transaction-based compensation (compensation 

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based on the amount of money he raised from investors).  

VIOLATIONS 

6. By virtue of the foregoing conduct and as alleged further herein, Defendants Native 

American Energy, D’Arrigo, and Hudzik have violated Sections 5(a) and (c) and 17(a) of the 

Securities Act of 1933 (“Securities Act”) [15 U.S.C. §§ 77e(a), 77e(c), and 77q(a)], Section 10(b) of 

the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78j(b)], and Rule 10b-5 

thereunder [17 C.F.R. § 240.10b-5], and Hudzik has also violated Section 15(a) of the Exchange Act 

[15 U.S.C. § 78o(a)]. 

7. Unless Defendants are restrained and enjoined, they will engage in the acts, practices, 

transactions, and courses of business set forth in this Complaint or in acts, practices, transactions, 

and courses of business of similar type and object.   

NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT 

8. The Commission brings this action pursuant to the authority conferred upon it by 

Securities Act Sections 20(b) and 20(d) [15 U.S.C. §§ 77t(b) and 77t(d)] and Exchange Act Section 

21(d) [15 U.S.C. § 78u(d)].  

9. The Commission seeks a final judgment: (a) permanently enjoining Defendants from 

violating the federal securities laws and rules this Complaint alleges they have violated; (b) ordering 

Defendants to disgorge all ill-gotten gains they received as a result of the violations alleged herein 

and to pay prejudgment interest thereon, pursuant to Exchange Act Sections 21(d)(3), 21(d)(5), and 

21(d)(7) [15 U.S.C. §§ 78u(d)(3), 78u(d)(5), and 78u(d)(7)]; (c) ordering Defendants to pay civil 

money penalties pursuant to Securities Act Section 20(d) [15 U.S.C. § 77t(d)] and Exchange Act 

Section 21(d)(3) [15 U.S.C. § 78u(d)(3)]; (d) permanently prohibiting D’Arrigo and Hudzik from 

serving as an officer or director of any company that has a class of securities registered under 

Exchange Act Section 12 [15 U.S.C. § 78l] or that is required to file reports under Exchange Act 

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Section 15(d) [15 U.S.C. § 78o(d)], pursuant to Securities Act Section 20(e) [15 U.S.C. § 77t(e)] and 

Exchange Act Section 21(d)(2) [15 U.S.C. § 78u(d)(2)]; (e) permanently prohibiting D’Arrigo and 

Hudzik from participating in any offering of a penny stock, pursuant to Securities Act Section 20(g) 

[15 U.S.C. § 77t(g)] and Exchange Act Section 21(d)(6) [15 U.S.C. § 78u(d)(6)]; (f) ordering Relief 

Defendants to pay, with prejudgment interest, all ill-gotten gains by which they were unjustly 

enriched, pursuant to Exchange Act Sections 21(d)(3), 21(d)(5), and 21(d)(7) [15 U.S.C. §§ 78u(d)(3), 

78u(d)(5), and 78u(d)(7)]; and (g) ordering any other and further relief the Court may deem just and 

proper.  

JURISDICTION AND VENUE 

10. This Court has jurisdiction over this action pursuant to Securities Act Section 22(a) 

[15 U.S.C. § 77v(a)] and Exchange Act Section 27 [15 U.S.C. § 78aa].  

11. Defendants, directly and indirectly, have made use of the means or instrumentalities 

of interstate commerce or of the mails in connection with the transactions, acts, practices, and 

courses of business alleged herein. 

12. Venue lies in this District under Securities Act Section 22(a) [15 U.S.C. § 77v(a)] and  

Exchange Act Section 27 [15 U.S.C. § 78aa].  Defendants may be found in, are inhabitants of, or 

transact business in the Eastern District of  New York, and certain of  the acts, practices, 

transactions, and courses of  business alleged in this Complaint occurred within this District, 

including Defendants’ solicitation of  investors.  For example, Hudzik, a resident of this District, 

solicited investors, including investors who also reside in this District, in person and by telephone, 

email, and text message from this District. 

DEFENDANTS 

13. Native American Energy, formed in 2005, is a Delaware corporation with its 

principal place of business in Queens, New York.  The company describes itself as “an energy 

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resource development and management company.”  Native American Energy purportedly had active 

field operations on the Fort Peck Indian Reservation in Montana from 2005 to 2013 and, from 2008 

to 2011, sold oil from five wells that it operated to Shell Trading (US) Company.  Native American 

Energy’s alleged well operations ceased in or around 2013.  Since then, the company has not had any 

business operations and has not generated any revenue.  In 2020, the Connecticut Banking 

Commissioner issued an order imposing a $100,000 fine upon Native American Energy for violating 

the antifraud provisions in Section 36b-4(a) of the Connecticut Uniform Securities Act. 

14. D’Arrigo, age 61, is a resident of East Stroudsburg, Pennsylvania.  D’Arrigo has 

served as the Chief Executive Officer and a Director of Native American Energy since 2005.  He is 

a co-founder of the company.  Between August and December 1999 and again between March 2004 

and July 2005, D’Arrigo was a registered representative at Commission-registered broker-dealers and 

held Series 7 and 63 securities licenses.  In 2020, the Connecticut Banking Commissioner issued an 

order imposing a $100,000 fine upon D’Arrigo for violating the antifraud provisions in Section 36b-

4(a) of the Connecticut Uniform Securities Act.   

15. Hudzik, age 49, is a resident of East Meadow, New York.  Hudzik worked as a 

consultant for Native American Energy from January 2017 through December 2018.  Between July 

1996 and July 2016, Hudzik was a registered representative at a series of Commission-registered 

broker-dealers and held Series 7 and 63 securities licenses.  Hudzik has not been registered as an 

associated person with a broker-dealer since July 2016 and has never himself been registered with 

the Commission as a broker-dealer or in any other capacity.    

RELIEF DEFENDANTS 

16. Lisa, age 60, is a resident of East Stroudsburg, Pennsylvania, and is D’Arrigo’s wife.  

At D’Arrigo’s direction, Lisa received approximately $32,700 in investor proceeds from Native 

American Energy.  

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17. Alejandro, age 46, is a resident of East Meadow, New York, and is Hudzik’s 

romantic partner.  At Hudzik’s request, D’Arrigo directed that Native American Energy transfer 

approximately $70,000 in investor proceeds to Alejandro.   

FACTS 

I. DEFENDANTS OFFERED AND SOLD NATIVE AMERICAN ENERGY 
COMMON STOCK. 

18. Although Native American Energy effectively ended its business operations in or 

around 2013, the company continued to solicit investors to purchase its common stock and, in so 

doing, raised at least $3.43 million from at least 100 investors across the country between October 

2014 and August 2020 (the “Relevant Period”).  

19. Among other things, during the Relevant Period, the company, through D’Arrigo, 

hired several formerly licensed registered representatives, including Hudzik, to identify and solicit 

investors. 

20. D’Arrigo, Hudzik, and the other stock salespersons solicited investors in person and 

by telephone, email, and text message.    

21. To purchase shares of Native American Energy common stock, investors provided 

funds to the company by check or wire. 

22. Investors also completed a subscription agreement in which they, among other 

things, warranted their status as an “accredited investor.”  

23. Pursuant to Rule 501 of Regulation D under the Securities Act [17 C.F.R. § 230.501], 

an accredited investor is someone who: (i) has a net worth over $1 million, excluding primary 

residence (individually or with a spouse or partner); (ii) has an income over $200,000 (individually) 

or $300,000 (with a spouse or partner) in each of the prior two years, and reasonably expects the 

same income level in the current year; (iii) holds in good standing a Series 7, 65, or 82 securities 

license; (iv) is a director, executive officer, or general partner of the company selling the securities 

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(or of a general partner of that company); (v) is a “family client” of a “family office” that qualifies as 

an accredited investor; or (vi) for investments in a private fund, is a “knowledgeable employee” of 

the fund. 

24. During the Relevant Period, Native American Energy and its representatives did not 

limit their solicitations to individuals who they believed would qualify as accredited investors. 

25. The company and its representatives also did not take any steps to verify investors’ 

accreditation.  

26. In addition to not verifying investors’ accreditation, there was no registration 

statement with the Commission in effect in connection with the company’s offers and sales of 

common stock.  

27. Moreover, no valid exemption from registration existed with respect to the 

company’s offers and sales of its common stock.  

28. Further, the company and its representatives did not disclose to investors that Native 

American Energy’s Chief Financial Officer is subject to an order of the Commission entered in 2005 

pursuant to Exchange Act Section 15(b) [15 U.S.C. § 78o(b)], which permanently bars him from 

association with any broker or dealer. 

29. During the Relevant Period, Native American Energy did not have any sources of 

income other than money raised from investors. 

30. During the Relevant Period, D’Arrigo also transferred to himself and Lisa, withdrew 

in cash, and spent on personal expenses approximately $958,500 in investor proceeds, representing 

approximately 28 percent of the total amount raised from investors, as described in more detail 

below in Section III.    

31. D’Arrigo transferred an additional approximately $1.46 million to the company’s 

stock salespersons, representing more than 42 percent of the total amount raised from investors.  

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II. DEFENDANTS MADE MATERIAL MISREPRESENTATIONS TO 
INVESTORS. 

 
A. Defendants Solicited Investors with a Misleading Subscription Agreement. 

32. The subscription agreement Defendants provided to investors contained false and 

misleading statements regarding the use of investor proceeds.   

33. The subscription agreement described the subscription as an “investment in the 

Company.”  

34. Yet the subscription agreement did not disclose that the majority of investor 

proceeds—approximately 70 percent—would be used to compensate D’Arrigo and the company’s 

stock salespersons.    

35. Indeed, investors were unaware that their investments would largely be used to pay 

D’Arrigo and the company’s stock salespersons.   

36. Investors instead believed that their investments would be used to fund company 

operations and development. 

37. D’Arrigo and Hudzik provided the subscription agreement to investors, along with 

wiring instructions to pay for the shares purchased.  

38. D’Arrigo also provided the subscription agreement to the company’s stock 

salespersons for use in soliciting investors. 

39. In addition, D’Arrigo approved the subscription agreement’s use and signed it on 

behalf of the company. 

40. D’Arrigo knew or recklessly disregarded that: (i) the subscription agreement 

misleadingly described the subscription as an “investment in the Company”; (ii) the majority of 

investor proceeds would be used to pay himself and the company’s stock salespersons; and (iii) 

investors were unaware of those payments. 

41. Hudzik likewise knew or recklessly disregarded that the subscription agreement was 

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misleading, as he knew or recklessly disregarded that he would receive a large portion of the 

investments he sold and that investors were unaware their investments would be used in that 

manner.          

B. Hudzik Deceived Investors Regarding His Commissions.   
 

42. In 2017 and 2018, Hudzik solicited friends, acquaintances, and family members to 

purchase shares of Native American Energy common stock and, in so doing, discussed the merits of 

the investment with them. 

43. For example, Hudzik told investors that Native American Energy was pursuing 

several projects and potential acquisitions that would make the company more valuable and that its 

stock price would ultimately increase from $0.10 per share to $2.00 or more per share.   

44. During that period, Hudzik was not registered with the Commission as a broker or 

dealer or associated with a registered broker or dealer.    

45. Hudzik generally received a commission of 20 to 30 percent on the investments he 

sold, including the following investments: 

 Date of Investment Amount 
Invested 

Date(s) of  
Commission Payment  

Commission 
Amount 

Commission 
Percentage 

February 9, 2017 $25,000 February 10, 2017 
February 13, 2017 $6,250 25% 

February 22, 2017 $50,000 February 23-24, 2017 $12,500 25% 

March 13, 2017 $25,000 March 14, 2017 
March 16, 2017 $6,250 25% 

June 22, 2017 $5,000 June 26, 2017 $1,500 30% 

July 6, 2017 $50,000 July 10, 2017 $15,000 30% 

November 21, 2017 $5,000 November 22, 2017 $1,000 20% 

November 28, 2017 $5,000 December 1, 2017 $1,500 30% 

December 15, 2017 $5,000 December 18, 2017 $1,000 20% 

December 18, 2017 $2,500 December 20, 2017 $500 20% 

January 24, 2018 $25,000 February 6, 2018 $5,000 20% 

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 Date of Investment Amount 
Invested 

Date(s) of  
Commission Payment  

Commission 
Amount 

Commission 
Percentage 

March 6, 2018 $25,000 March 7, 2018 $5,000 20% 

April 11, 2018 $10,000 April 17, 2018 $2,000 20% 

May 22, 2018 $25,000 May 25, 2018 $5,000 20% 

June 26, 2018 $25,000 June 27, 2018 
June 29, 2018 $7,500 30% 

TOTAL $282,500  $70,000 ~24.8% 

46. Each commission payment—$70,000 in total—was delivered to Hudzik’s romantic 

partner, Alejandro, as Hudzik purportedly did not have any bank account at the time.  

47. Alejandro did not provide any consideration in return for receiving these 

commission payments.  

48. Neither Hudzik nor the subscription agreement he provided to investors disclosed 

that he would receive these commissions.  

49. Instead, Hudzik falsely told most investors he solicited that he would only receive a 

commission on any profits earned after the investor sold their Native American Energy shares on 

the open market. 

50. Hudzik told one investor that he would receive an up-front commission, but did not 

disclose the percentage. 

51. For other investors, Hudzik did not say anything about commissions.   

52. When Hudzik solicited investors to purchase shares of Native American Energy 

common stock, he knew or recklessly disregarded that he would receive the above-described 

commissions and that investors were unaware of those commissions.  

III. D’ARRIGO MISAPPROPRIATED INVESTOR PROCEEDS.     

53. During the Relevant Period, Native American Energy had two bank accounts in its 

name, and both of them received investor proceeds.  D’Arrigo alone controlled those accounts. 

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54. Drawing upon that authority, D’Arrigo misappropriated approximately $958,500 in 

investor proceeds for his personal use during the Relevant Period.   

55. Specifically, D’Arrigo transferred to himself, or withdrew in cash, approximately 

$860,300.  

56. D’Arrigo also transferred approximately $32,700 to his wife, Lisa.   

57. Lisa did not provide any consideration in exchange for her receipt of these funds.  

58. In addition, D’Arrigo used approximately $65,500 to pay personal credit card bills 

and to make numerous purchases at restaurants, gas stations, grocery stores, drug stores, and other 

retailers, including TJ Maxx, Ulta Beauty, Target, Home Depot, Walmart, Big Lots, Men’s 

Wearhouse, and Cohen’s Fashion Optical.   

59. D’Arrigo knew or recklessly disregarded that he was engaged in manipulative, 

deceptive, and fraudulent conduct by, among other things, soliciting investors with a misleading 

subscription agreement that described the subscription as an “investment in the Company,” 

transferring investor proceeds to himself and Lisa, withdrawing investor proceeds in cash, and 

spending investor proceeds on personal expenses.    

FIRST CLAIM FOR RELIEF 
Violations of Securities Act Section 17(a) 

(All Defendants) 

60. The Commission re-alleges and incorporates by reference here the allegations in 

paragraphs 1 through 59. 

61. Defendants, directly or indirectly, singly or in concert, in the offer or sale of 

securities and by the use of the means or instruments of transportation or communication in 

interstate commerce or the mails, (1) knowingly or recklessly have employed one or more devices, 

schemes or artifices to defraud, (2) knowingly, recklessly, or negligently have obtained money or 

property by means of one or more untrue statements of a material fact or omissions of a material 

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fact necessary in order to make the statements made, in light of the circumstances under which they 

were made, not misleading, and/or (3) knowingly, recklessly, or negligently have engaged in one or 

more transactions, practices, or courses of business which operated or would operate as a fraud or 

deceit upon the purchaser. 

62. By reason of the foregoing, Defendants, directly or indirectly, singly or in concert, 

have violated and, unless enjoined, will again violate Securities Act Section 17(a) [15 U.S.C. § 77q(a)]. 

SECOND CLAIM FOR RELIEF 
Violations of Exchange Act Section 10(b) and Rule 10b-5 Thereunder 

(All Defendants) 

63. The Commission re-alleges and incorporates by reference here the allegations in 

paragraphs 1 through 59. 

64. Defendants, directly or indirectly, singly or in concert, in connection with the 

purchase or sale of securities and by the use of means or instrumentalities of interstate commerce, or 

the mails, or the facilities of a national securities exchange, knowingly or recklessly have (i) employed 

one or more devices, schemes, or artifices to defraud, (ii) made one or more untrue statements of a 

material fact or omitted to state one or more material facts necessary in order to make the 

statements made, in light of the circumstances under which they were made, not misleading, and/or 

(iii) engaged in one or more acts, practices, or courses of business which operated or would operate 

as a fraud or deceit upon other persons. 

65. By reason of the foregoing, Defendants, directly or indirectly, singly or in concert, 

have violated and, unless enjoined, will again violate Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] 

and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. 

THIRD CLAIM FOR RELIEF 
Violations of Securities Act Sections 5(a) and (c) 

(All Defendants) 

66. The Commission re-alleges and incorporates by reference here the allegations in 

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 13 

paragraphs 1 through 29, paragraph 32, paragraphs 37 through 39, paragraphs 42 through 45, 

paragraphs 48 through 51, and paragraph 53. 

67. Defendants, directly or indirectly, singly or in concert, (i) made use of means or 

instruments of transportation or communication in interstate commerce or of the mails to sell, 

through the use or medium of a prospectus or otherwise, securities as to which no registration 

statement was in effect; (ii) for the purpose of sale or for delivery after sale, carried or caused to be 

carried through the mails or in interstate commerce, by any means or instruments of transportation, 

securities as to which no registration statement was in effect; or (iii) made use of means or 

instruments of transportation or communication in interstate commerce or of the mails to offer to 

sell or offer to buy, through the use or medium of a prospectus or otherwise, securities as to which 

no registration statement had been filed. 

68. By reason of the foregoing, Defendants violated and, unless enjoined, will again 

violate, Securities Act Sections 5(a) and 5(c) [15 U.S.C. §§ 77e(a) and 77e(c)]. 

FOURTH CLAIM FOR RELIEF 
Violations of Exchange Act Section 15(a) 

(Hudzik) 

69. The Commission re-alleges and incorporates by reference here the allegations in 

paragraphs 1 through 3, paragraphs 5 through 28, paragraphs 31 through 37, and paragraphs 41 

through 52. 

70. Hudzik, as a natural person not associated with a broker or dealer which is a person 

other than a natural person, made use of the mails or any means or instrumentality of interstate 

commerce to effect transactions in, or to induce or attempt to induce the purchase or sale of, any 

security without being registered with the Commission as a broker-dealer.  

71. By reason of the foregoing, Hudzik violated, and, unless enjoined, will again violate 

Exchange Act Section 15(a) [15 U.S.C. § 78o(a)]. 

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FIFTH CLAIM FOR RELIEF 
Unjust Enrichment 
(Relief Defendants) 

72. The Commission re-alleges and incorporates by reference here the allegations in 

paragraphs 1 through 59. 

73. Lisa and Alejandro received approximately $32,700 and $70,000, respectively, in 

investor proceeds from Native American Energy. 

74. Relief Defendants have no legitimate claim to these ill-gotten gains.  

75. Relief Defendants obtained the funds under circumstances in which it is not just, 

equitable, or conscionable for them to retain the funds.  

76. Relief Defendants have therefore been unjustly enriched. 

PRAYER FOR RELIEF 

 WHEREFORE, the Commission respectfully requests that the Court enter a Final 

Judgment: 

I. 

Permanently enjoining Native American Energy and its agents, servants, employees and 

attorneys and all persons in active concert or participation with any of them from violating, directly 

or indirectly, Securities Act Sections 5(a) and (c) and 17(a) [15 U.S.C. §§ 77e(a), 77e(c), and 77q(a)], 

Exchange Act Section 10(b) [15 U.S.C. § 78j(b)], and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5];  

II. 

Permanently enjoining D’Arrigo and his agents, servants, employees and attorneys and all 

persons in active concert or participation with any of them from violating, directly or indirectly, 

Securities Act Sections 5(a) and (c) and 17(a) [15 U.S.C. §§ 77e(a), 77e(c), and 77q(a)], Exchange Act 

Section 10(b) [15 U.S.C. § 78j(b)], and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]; 

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III. 

Permanently enjoining Hudzik and his agents, servants, employees and attorneys and all 

persons in active concert or participation with any of them from violating, directly or indirectly, 

Securities Act Sections 5(a) and (c) and 17(a) [15 U.S.C. §§ 77e(a), 77e(c), and 77q(a)], Exchange Act 

Sections 10(b) and 15(a) [15 U.S.C. §§ 78j(b) and 78o(a)], and Rule 10b-5 thereunder [17 C.F.R. 

§ 240.10b-5]; 

IV. 

Ordering Defendants and Relief Defendants to disgorge all ill-gotten gains they received 

directly or indirectly, with prejudgment interest thereon, as a result of the alleged violations, 

pursuant to Exchange Act Sections 21(d)(3), 21(d)(5), and 21(d)(7) [15 U.S.C. §§ 78u(d)(3), 

78u(d)(5), and 78u(d)(7)]; 

V. 

Ordering Defendants to pay civil monetary penalties under Securities Act Section 20(d) 

[15 U.S.C. § 77t(d)] and Exchange Act Section 21(d)(3) [15 U.S.C. § 78u(d)(3)];  

VI. 

Permanently prohibiting D’Arrigo and Hudzik from serving as an officer or director of any 

company that has a class of securities registered under Exchange Act Section 12 [15 U.S.C. § 78l] or 

that is required to file reports under Exchange Act Section 15(d) [15 U.S.C. § 78o(d)], pursuant to 

Securities Act Section 20(e) [15 U.S.C. § 77t(e)] and Exchange Act Section 21(d)(2) [15 U.S.C. 

§ 78u(d)(2)]; 

VII. 

Permanently prohibiting D’Arrigo and Hudzik from participating in any offering of a penny 

stock, including engaging in activities with a broker, dealer, or issuer for purposes of issuing, trading, 

or inducing or attempting to induce the purchase or sale of any penny stock, under Exchange Act 

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Section 21(d)(6) [15 U.S.C § 78u(d)(6)]; 

VIII. 

Granting any other and further relief this Court may deem just and proper. 

JURY DEMAND 

The Commission demands a trial by jury. 

Dated: New York, New York 
June 16, 2023 

REGIONAL DIRECTOR 
Sheldon L. Pollock 
Gerald Gross 
Preethi Krishnamurthy 
Orristine D. Ely 
Benjamin S. Mishkin 
Attorneys for Plaintiff 
SECURITIES AND EXG-IANGE COMMISSION 
New York Regional Office 
100 Pearl Street 
Suite 20-100 
New York, NY 10004-2616 
(212) 336-0116 (Krishnamurthy) 
[email protected] 

16 

Case 1:23-cv-04455   Document 1   Filed 06/16/23   Page 16 of 16 PageID #: 16


	antonia M. apps
	Regional Director
	Sheldon L. Pollock
	Gerald Gross
	Preethi Krishnamurthy
	Christine D. Ely
	Benjamin S. Mishkin
	Attorneys for Plaintiff
	SECURITIES AND EXCHANGE COMMISSION
	New York Regional Office
	100 Pearl Street
	Suite 20-100
	(212) 336-0116 (Krishnamurthy)
	[email protected]
	Plaintiff Securities and Exchange Commission (“Commission”), for its Complaint against Defendants Native American Energy Group, Inc. (“Native American Energy”), Joseph D’Arrigo (“D’Arrigo”), and David Hudzik (“Hudzik”) (collectively, “Defendants”) and...
	SUMMARY
	1. Between October 2014 and August 2020, Defendants made material misrepresentations to investors when offering Native American Energy common stock and unlawfully offered and sold the stock without a registration statement which was required under the...
	2. Defendants solicited investors with a misleading subscription agreement that described the subscription as an “investment in the Company.”  In reality, D’Arrigo, the Chief Executive Officer of Native American Energy, and the company’s stock salespe...
	3. Additionally, Hudzik, a consultant for the company from January 2017 through December 2018, falsely told investors that he would only receive a commission on any profits earned after an investor sold their Native American Energy shares.  In fact, H...
	4. D’Arrigo also misappropriated approximately $958,500 in investor proceeds for his personal benefit, using the proceeds to withdraw cash for himself, to wire money to himself and his wife, Relief Defendant Lisa, to pay personal credit card bills, an...
	5. Defendants also violated registration provisions of the securities laws.  Defendants offered and sold Native American Energy common stock to investors when no registration statement was in effect and no exemption from registration applied.  Moreove...
	VIOLATIONS
	6. By virtue of the foregoing conduct and as alleged further herein, Defendants Native American Energy, D’Arrigo, and Hudzik have violated Sections 5(a) and (c) and 17(a) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. §§ 77e(a), 77e(c), a...
	7. Unless Defendants are restrained and enjoined, they will engage in the acts, practices, transactions, and courses of business set forth in this Complaint or in acts, practices, transactions, and courses of business of similar type and object.
	NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT
	8. The Commission brings this action pursuant to the authority conferred upon it by Securities Act Sections 20(b) and 20(d) [15 U.S.C. §§ 77t(b) and 77t(d)] and Exchange Act Section 21(d) [15 U.S.C. § 78u(d)].
	9. The Commission seeks a final judgment: (a) permanently enjoining Defendants from violating the federal securities laws and rules this Complaint alleges they have violated; (b) ordering Defendants to disgorge all ill-gotten gains they received as a ...
	JURISDICTION AND VENUE
	10. This Court has jurisdiction over this action pursuant to Securities Act Section 22(a) [15 U.S.C. § 77v(a)] and Exchange Act Section 27 [15 U.S.C. § 78aa].
	11. Defendants, directly and indirectly, have made use of the means or instrumentalities of interstate commerce or of the mails in connection with the transactions, acts, practices, and courses of business alleged herein.
	12. Venue lies in this District under Securities Act Section 22(a) [15 U.S.C. § 77v(a)] and  Exchange Act Section 27 [15 U.S.C. § 78aa].  Defendants may be found in, are inhabitants of, or transact business in the Eastern District of New York, and cer...
	DEFENDANTS
	13. Native American Energy, formed in 2005, is a Delaware corporation with its principal place of business in Queens, New York.  The company describes itself as “an energy resource development and management company.”  Native American Energy purported...
	14. D’Arrigo, age 61, is a resident of East Stroudsburg, Pennsylvania.  D’Arrigo has served as the Chief Executive Officer and a Director of Native American Energy since 2005.  He is a co-founder of the company.  Between August and December 1999 and a...
	15. Hudzik, age 49, is a resident of East Meadow, New York.  Hudzik worked as a consultant for Native American Energy from January 2017 through December 2018.  Between July 1996 and July 2016, Hudzik was a registered representative at a series of Comm...
	RELIEF DEFENDANTS
	16. Lisa, age 60, is a resident of East Stroudsburg, Pennsylvania, and is D’Arrigo’s wife.  At D’Arrigo’s direction, Lisa received approximately $32,700 in investor proceeds from Native American Energy.
	17. Alejandro, age 46, is a resident of East Meadow, New York, and is Hudzik’s romantic partner.  At Hudzik’s request, D’Arrigo directed that Native American Energy transfer approximately $70,000 in investor proceeds to Alejandro.
	18. Although Native American Energy effectively ended its business operations in or around 2013, the company continued to solicit investors to purchase its common stock and, in so doing, raised at least $3.43 million from at least 100 investors across...
	19. Among other things, during the Relevant Period, the company, through D’Arrigo, hired several formerly licensed registered representatives, including Hudzik, to identify and solicit investors.
	20. D’Arrigo, Hudzik, and the other stock salespersons solicited investors in person and by telephone, email, and text message.
	21. To purchase shares of Native American Energy common stock, investors provided funds to the company by check or wire.
	22. Investors also completed a subscription agreement in which they, among other things, warranted their status as an “accredited investor.”
	23. Pursuant to Rule 501 of Regulation D under the Securities Act [17 C.F.R. § 230.501], an accredited investor is someone who: (i) has a net worth over $1 million, excluding primary residence (individually or with a spouse or partner); (ii) has an in...
	24. During the Relevant Period, Native American Energy and its representatives did not limit their solicitations to individuals who they believed would qualify as accredited investors.
	25. The company and its representatives also did not take any steps to verify investors’ accreditation.
	26. In addition to not verifying investors’ accreditation, there was no registration statement with the Commission in effect in connection with the company’s offers and sales of common stock.
	27. Moreover, no valid exemption from registration existed with respect to the company’s offers and sales of its common stock.
	28. Further, the company and its representatives did not disclose to investors that Native American Energy’s Chief Financial Officer is subject to an order of the Commission entered in 2005 pursuant to Exchange Act Section 15(b) [15 U.S.C. § 78o(b)], ...
	29. During the Relevant Period, Native American Energy did not have any sources of income other than money raised from investors.
	30. During the Relevant Period, D’Arrigo also transferred to himself and Lisa, withdrew in cash, and spent on personal expenses approximately $958,500 in investor proceeds, representing approximately 28 percent of the total amount raised from investor...
	31. D’Arrigo transferred an additional approximately $1.46 million to the company’s stock salespersons, representing more than 42 percent of the total amount raised from investors.
	II. DEFENDANTS made material misrepresentations to investors.
	A. Defendants Solicited Investors with a Misleading Subscription Agreement.
	32. The subscription agreement Defendants provided to investors contained false and misleading statements regarding the use of investor proceeds.
	33. The subscription agreement described the subscription as an “investment in the Company.”
	34. Yet the subscription agreement did not disclose that the majority of investor proceeds—approximately 70 percent—would be used to compensate D’Arrigo and the company’s stock salespersons.
	35. Indeed, investors were unaware that their investments would largely be used to pay D’Arrigo and the company’s stock salespersons.
	36. Investors instead believed that their investments would be used to fund company operations and development.
	37. D’Arrigo and Hudzik provided the subscription agreement to investors, along with wiring instructions to pay for the shares purchased.
	38. D’Arrigo also provided the subscription agreement to the company’s stock salespersons for use in soliciting investors.
	39. In addition, D’Arrigo approved the subscription agreement’s use and signed it on behalf of the company.
	40. D’Arrigo knew or recklessly disregarded that: (i) the subscription agreement misleadingly described the subscription as an “investment in the Company”; (ii) the majority of investor proceeds would be used to pay himself and the company’s stock sal...
	41. Hudzik likewise knew or recklessly disregarded that the subscription agreement was misleading, as he knew or recklessly disregarded that he would receive a large portion of the investments he sold and that investors were unaware their investments ...
	B. Hudzik Deceived Investors Regarding His Commissions.
	42. In 2017 and 2018, Hudzik solicited friends, acquaintances, and family members to purchase shares of Native American Energy common stock and, in so doing, discussed the merits of the investment with them.
	43. For example, Hudzik told investors that Native American Energy was pursuing several projects and potential acquisitions that would make the company more valuable and that its stock price would ultimately increase from $0.10 per share to $2.00 or m...
	44. During that period, Hudzik was not registered with the Commission as a broker or dealer or associated with a registered broker or dealer.
	45. Hudzik generally received a commission of 20 to 30 percent on the investments he sold, including the following investments:
	46. Each commission payment—$70,000 in total—was delivered to Hudzik’s romantic partner, Alejandro, as Hudzik purportedly did not have any bank account at the time.
	47. Alejandro did not provide any consideration in return for receiving these commission payments.
	48. Neither Hudzik nor the subscription agreement he provided to investors disclosed that he would receive these commissions.
	49. Instead, Hudzik falsely told most investors he solicited that he would only receive a commission on any profits earned after the investor sold their Native American Energy shares on the open market.
	50. Hudzik told one investor that he would receive an up-front commission, but did not disclose the percentage.
	51. For other investors, Hudzik did not say anything about commissions.
	52. When Hudzik solicited investors to purchase shares of Native American Energy common stock, he knew or recklessly disregarded that he would receive the above-described commissions and that investors were unaware of those commissions.
	III. D’ARRIGO MISAPPROPRIATED INVESTOR PROCEEDS.
	53. During the Relevant Period, Native American Energy had two bank accounts in its name, and both of them received investor proceeds.  D’Arrigo alone controlled those accounts.
	54. Drawing upon that authority, D’Arrigo misappropriated approximately $958,500 in investor proceeds for his personal use during the Relevant Period.
	55. Specifically, D’Arrigo transferred to himself, or withdrew in cash, approximately $860,300.
	56. D’Arrigo also transferred approximately $32,700 to his wife, Lisa.
	57. Lisa did not provide any consideration in exchange for her receipt of these funds.
	58. In addition, D’Arrigo used approximately $65,500 to pay personal credit card bills and to make numerous purchases at restaurants, gas stations, grocery stores, drug stores, and other retailers, including TJ Maxx, Ulta Beauty, Target, Home Depot, W...
	59. D’Arrigo knew or recklessly disregarded that he was engaged in manipulative, deceptive, and fraudulent conduct by, among other things, soliciting investors with a misleading subscription agreement that described the subscription as an “investment ...
	Violations of Securities Act Section 17(a)
	(All Defendants)
	60. The Commission re-alleges and incorporates by reference here the allegations in paragraphs 1 through 59.
	61. Defendants, directly or indirectly, singly or in concert, in the offer or sale of securities and by the use of the means or instruments of transportation or communication in interstate commerce or the mails, (1) knowingly or recklessly have employ...
	62. By reason of the foregoing, Defendants, directly or indirectly, singly or in concert, have violated and, unless enjoined, will again violate Securities Act Section 17(a) [15 U.S.C. § 77q(a)].
	Violations of Exchange Act Section 10(b) and Rule 10b-5 Thereunder
	(All Defendants)
	63. The Commission re-alleges and incorporates by reference here the allegations in paragraphs 1 through 59.
	64. Defendants, directly or indirectly, singly or in concert, in connection with the purchase or sale of securities and by the use of means or instrumentalities of interstate commerce, or the mails, or the facilities of a national securities exchange,...
	65. By reason of the foregoing, Defendants, directly or indirectly, singly or in concert, have violated and, unless enjoined, will again violate Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].
	THIRD CLAIM FOR RELIEF
	Violations of Securities Act Sections 5(a) and (c)
	(All Defendants)
	66. The Commission re-alleges and incorporates by reference here the allegations in paragraphs 1 through 29, paragraph 32, paragraphs 37 through 39, paragraphs 42 through 45, paragraphs 48 through 51, and paragraph 53.
	67. Defendants, directly or indirectly, singly or in concert, (i) made use of means or instruments of transportation or communication in interstate commerce or of the mails to sell, through the use or medium of a prospectus or otherwise, securities as...
	68. By reason of the foregoing, Defendants violated and, unless enjoined, will again violate, Securities Act Sections 5(a) and 5(c) [15 U.S.C. §§ 77e(a) and 77e(c)].
	FOURTH CLAIM FOR RELIEF
	Violations of Exchange Act Section 15(a)
	(Hudzik)
	69. The Commission re-alleges and incorporates by reference here the allegations in paragraphs 1 through 3, paragraphs 5 through 28, paragraphs 31 through 37, and paragraphs 41 through 52.
	70. Hudzik, as a natural person not associated with a broker or dealer which is a person other than a natural person, made use of the mails or any means or instrumentality of interstate commerce to effect transactions in, or to induce or attempt to in...
	71. By reason of the foregoing, Hudzik violated, and, unless enjoined, will again violate Exchange Act Section 15(a) [15 U.S.C. § 78o(a)].
	72. The Commission re-alleges and incorporates by reference here the allegations in paragraphs 1 through 59.
	73. Lisa and Alejandro received approximately $32,700 and $70,000, respectively, in investor proceeds from Native American Energy.
	74. Relief Defendants have no legitimate claim to these ill-gotten gains.
	75. Relief Defendants obtained the funds under circumstances in which it is not just, equitable, or conscionable for them to retain the funds.
	76. Relief Defendants have therefore been unjustly enriched.
	PRAYER FOR RELIEF
	Dated: New York, New York
	Sheldon L. Pollock
	Gerald Gross
	Preethi Krishnamurthy
	Christine D. Ely
	Benjamin S. Mishkin
	Attorneys for Plaintiff
	SECURITIES AND EXCHANGE COMMISSION
	New York Regional Office
	100 Pearl Street
	Suite 20-100