SEC v. American Equities, Inc.; American Eagle Mortgage Management, LLC; Ross C. Miles; and Maureen T. Wile, No. 3:22-cv-00621-SB, District of Oregon (Apr. 27, 2022) — Complaint

Complaint                                                            1  Case No.: 3:22-cv-621
BERNARD B. SMYTH (Cal. Bar No. 217741)
  [email protected]
MONIQUE C. WINKLER (Cal. Bar No. 213031)
JEREMY E. PENDREY (Cal. Bar No. 187075)
ROBERT J. DURHAM (N.Y. Bar No. 2973022)
  [email protected]
KASHYA K. SHEI (Cal. Bar No. 173125)
  [email protected]

Attorneys for Plaintiff
SECURITIES AND EXCHANGE COMMISSION
44 Montgomery Street, Suite 2800
San Francisco, California 94104-4802
Telephone:  (415) 705-2500
Facsimile:  (415) 705-2501

UNITED STATES DISTRICT COURT

DISTRICT OF OREGON

PORTLAND DIVISION

SECURITIES AND EXCHANGE
COMMISSION,

                                               Plaintiff,

Case No.: 3:22-cv-621
v.                                                                           COMPLAINT

AMERICAN EQUITIES, INC., AMERICAN
EAGLE MORTGAGE MANAGEMENT,
LLC, ROSS C. MILES and MAUREEN
T. WILE,

                                              Defendants.

_____________________________________

Complaint                                                            2  Case No.: 3:22-cv-621
Plaintiff Securities and Exchange Commission (“Commission”) alleges:
SUMMARY OF THE ACTION
1. This action concerns a years-long fraud by Defendants American Equities, Inc.,
American Eagle Mortgage Management, LLC, Ross C. Miles and Maureen T. Wile (collectively,
“Defendants”) on investors in 15 private investment funds (the “Funds”) Defendants managed.
The Funds were designed to pool investor money, through the sale of promissory notes, to invest
in mortgages and trust deeds secured by real estate (the “Receivables”), with investor returns to
be paid primarily from the interest the Receivables generated and the profits made when the
Receivables were sold.  However, by approximately 2007, the Funds had become insolvent.  In
order to hide the Funds’ insolvency and keep their enterprise afloat, Defendants improperly
commingled the Funds’ assets and used new investor money to make payments due to existing
investors, as in a Ponzi scheme.
2. Separately, Defendants Miles and Wile misappropriated fund assets by making
unauthorized payments to themselves, family members and other related parties, which were
reflected in the Funds’ accounting records as loans.  In actuality, many of these purported loans
lacked basic documentation such as loan agreements, payment terms and interest rates, and
violated the Funds’ own underwriting standards.
3. As many of the purported loans were in fact unauthorized payments to Defendants
Miles and Wile and parties related to them, approximately $8.7 million remains unpaid and owed
to the Funds.
4. From about July 2011 through May 2019, Defendants raised approximately $15.5
million from investors without disclosing to the investors the insolvent financial condition of the
Funds and, in contravention to the representations made to investors, Defendants’ misuse of
investor proceeds.
5. By May 2019, the enterprise consisting of the 15 Funds managed by Defendants
collapsed because they were insolvent and unable to make required payments to investors or

Complaint                                                            3  Case No.: 3:22-cv-621
redeem investors as their promissory notes became due.  A Washington State court ordered the
Funds into receivership.
6. By their actions, Defendants violated the antifraud provisions of the Securities
Act of 1933 (“Securities Act”) and the Securities Exchange Act of 1934 (“Exchange Act”) in
connection with the offer and sale of securities issued by the 15 Funds they managed.
7. The Commission requests, among other things, that the Court: (i) permanently
enjoin Defendants from further violating the federal securities laws as alleged in this complaint;
(ii) prohibit Defendants Miles and Wile from acting as officers or directors of any publicly
traded company; (iii) order Defendants to pay disgorgement with prejudgment interest; and (iv)
order Defendants to pay civil monetary penalties.
JURISDICTION, VENUE AND INTRADISTRICT ASSIGNMENT
8. This Court has jurisdiction over this action pursuant to Sections 20(b), 20(d) and
22(a) of the Securities Act [15 U.S.C. §§ 77t(b), 77t(d) and 77v(a)] and Sections 21(d), 21(e) and
27 of the Exchange Act [15 U.S.C. §§ 78u(d), 78u(e) and 78aa].
9. Defendants, directly or indirectly, made use of the means and instruments of
interstate commerce or of the mails in connection with the acts, transactions, practices, and
courses of business alleged in this complaint.
10. Venue in this District is proper pursuant to Section 22(a) of the Securities Act [15
U.S.C. § 77v(a)] and Section 27 of the Exchange Act [15 U.S.C. § 78aa] because acts and
transactions constituting violations alleged in this Complaint, including the fraudulent offer and
sale of securities to Oregon residents, occurred within the District of Oregon.
11. Assignment to the Portland Division of this Court is proper because a substantial
part of the events or omissions that give rise to claims alleged in this Complaint occurred in
Clackamas, Clatsop, Multnomah and Washington counties, Oregon.

Complaint                                                            4  Case No.: 3:22-cv-621
DEFENDANTS
12. American Equities, Inc. (“AEI”) is a Washington corporation formed in 1984 and
located in Vancouver, Washington.  AEI was a manager of 15 Funds that invested in mortgages
and trust deeds secured by real estate.
13. American Eagle Mortgage Management, LLC (“AEMM”) is a Washington
company located in Vancouver, Washington that Defendants Ross C. Miles and Maureen
T. Wile formed in October 2010 which, in approximately February 2011, assumed AEI’s role as
the manager of the 15 Funds.  Miles and Wile co-owned AEMM and served as co-managers until
early 2022, when Wile resigned.
14. Ross C. Miles (“Miles”), age 72, resides in La Center, Washington.  He is the
founder, sole owner and president of AEI and co-owner of AEMM.  At all relevant times, Miles
was ultimately responsible for AEI’s and AEMM’s management of the Funds.
15. Maureen T. Wile (“Wile”), age 70, resides in Vancouver, Washington.  During
the events described below, she was the secretary of AEI, co-owner and co-manager of AEMM,
and ran the operations of both entities in their management of the Funds, including making daily
decisions about the management of the Funds.
RELATED ENTITY
16. American Eagle Mortgage 600, LLC (“Fund 600”) is a Washington company
formed in 2009 by AEI.  It is the last of the 15 Funds that AEI formed from 2003 through 2009.
Fund 600, like the others, raised money from investors in exchange for promissory notes that
carried a fixed interest rate, the amount of which depended on whether the investor chose a one,
five, ten or fifteen-year investment term.  The promissory notes were sold with accompanying
ownership interests in Fund 600.  The Private Placement Memorandum (“PPM”) for Fund 600
stated that Fund 600’s business was to invest in receivables secured by real estate in the United
States and Mexico.  From 2009 through 2018, Fund 600 raised money from investors in multiple
states, including dozens in Oregon.  In May 2019, a Washington State court placed Fund 600 and
the other funds into receivership.

Complaint                                                            5  Case No.: 3:22-cv-621
FACTUAL ALLEGATIONS
A. Background
17.   In approximately 2003, Miles and Wile, through AEI, created the first of the 15
Funds, and offered and sold to investors securities consisting of promissory notes accompanied
by an ownership interest in that fund.
18. After the creation of the first fund, approximately every six to twelve months,
Defendants created a new fund and offered and sold the fund’s securities to investors.  Some of
the fund offerings overlapped and, by 2009, Defendants had offered and sold securities in 13
additional funds.  In 2009, Defendants created, and began to offer and sell to investors securities
of Fund 600, the last of the 15 Funds.
19. Since 2011, approximately 84 percent of the new cash for investment raised by
the Funds has been in Fund 600.
20. Initially, Miles was the person responsible for the daily operations of Defendant
AEI.  Subsequently, and by at least 2011, Wile took over the day-to-day operations of the Funds,
first through Defendant AEI and later through Defendant AEMM.  Miles remained the ultimate
decision maker for Defendants AEI and AEMM (collectively, the “Manager”).
21. Defendants AEMM and AEI operated in the same office, and most employees
worked for both entities.
B. Defendants Miles and Wile Approved and Signed the Offering Materials
22. With each Fund offering, including Fund 600, the Manager provided investors
with offering materials, including a PPM, the fund’s Limited Liability Company (“LLC”)
Agreement, the fund’s Management Agreement, and a list of Minimum Underwriting Criteria for
Receivables (the “Offering Materials”).
23. Miles and Wile directed the drafting of the PPMs and approved and reviewed the
language of the PPMs.  Miles signed both the LLC and Management Agreements, which were
exhibits to the PPMs, as president of AEI, and Wile signed both agreements as secretary of AEI.

Complaint                                                            6  Case No.: 3:22-cv-621
24. The language of the Offering Materials for the Funds was largely the same,
varying mostly as to the timing of the offering, the amount sought to be raised, and the location
of the real estate that secured the fund’s Receivables (e.g., in the U.S., Mexico or both).
25. According to the Offering Materials, investor funds would “be used exclusively to
acquire the Receivables, pay the costs associated with the Offering, and cover working capital
needs of the [fund].”  The Receivables would generate revenue from monthly mortgage
payments by borrowers, mortgage payoffs and the sale of Receivables, which would be used to
pay investor returns.
26. At the time of making their investment, investors had the option to reinvest their
monthly interest payments, and within 90 days of the end of their investment term, to reinvest the
principal payments due to them.  Many investors elected one or both of these options.
27. The Offering Materials described the Manager’s underwriting process and
provided that the Manager would take steps to ensure that the Receivables were evidenced by
promissory notes and other documents reflecting the borrower’s obligation to pay and that these
would contain commercially reasonable terms and conditions.  Each receivable would be secured
by a single parcel of real property, and meet a certain loan-to-value ratio depending on the type
of property.
28. In addition, the Offering Materials provided that the Manager would segregate the
Funds’ assets and not allow them to be commingled with assets of the Manager or any other
fund.
C. The Fraudulent Scheme

i. Defendants Commingled Fund Assets and Made Ponzi-Like Payments to Investors
29. Since approximately 2008, Wile knew or was reckless in not knowing that the
Funds were insolvent because she received periodic reports showing the financial condition of
the Funds, including which funds lacked the cash revenue necessary to make monthly payments
to investors.  Based on these reports, Wile, in consultation with Miles, directed employees of the

Complaint                                                            7  Case No.: 3:22-cv-621
Manager to transfer money from one fund to other funds in order to make investor payments,
which resulted in extensive commingling of assets among the Funds.
30. In approximately 2008, well before the formation of Fund 600, Miles as the
owner and president of the Manager and the Manager’s ultimate decision maker, knew that the
Funds were insolvent because he had frequent meetings with Wile and received many of the
same reports showing the dire financial condition of the Funds.  Miles also knew of the
commingling of funds and the use of new investor money to pay existing investors.
31. Although Defendants were aware, by the time Fund 600 was created in 2009, that
the then-existing funds were insolvent and that investor monies were commingled among the
Funds, from 2009 through at least 2018, both Miles and Wile continued to raise money from
investors for Fund 600 and directed the Manager’s employees to continue to raise money from
investors.
32. The Offering Materials Defendants provided to Fund 600 investors before they
made their investments contained false and misleading representations.  For example, the
Offering Materials falsely stated that investor funds would be used primarily for the purchase of
Receivables.  In fact, much of the money raised was commingled with the existing funds and
used to pay interest payments to investors in those other funds.
33. The Offering Materials Defendants provided to Fund 600 investors also
prohibited the commingling of money among the Funds and did not permit the use of new
investor money to pay interest payments due to existing investors.  Nevertheless, as late as 2017,
Wile specifically instructed an employee of the Manager to raise new investor money for Fund
600 in order to make payments due to existing investors in the other funds.
34. Defendants Miles and Wile knew, or were reckless in not knowing, that the assets
of the Funds were being commingled, that new investor money was being used to pay existing
investors, and that these actions were not disclosed to investors.  They also knew, or were
reckless in not knowing, that the Offering Materials were materially false and misleading

Complaint                                                            8  Case No.: 3:22-cv-621
because the Offering Materials provided that assets would not be commingled and that investor
money was to be used primarily to purchase Receivables.
ii. Defendants Failed to Disclose Unauthorized Related-Party “Loans”
35. Since at least approximately 2007, Defendants Miles and Wile caused the Funds
to make millions of dollars in unauthorized transfers to themselves and parties related to one or
both of them.  The unauthorized transfers were documented in the Funds’ accounting records as
loans (hereinafter the purported loans are referred to as “related-party transfers”).
36. Although the Funds’ accounting records classify the related-party transfers as
loans, the related-party transfers were not secured by real estate, despite the fact that the Funds
were designed to use investor money to invest in real estate-backed investments.  In addition,
many of the related-party transfers lacked basic documentation, such as promissory notes
evidencing the related party’s obligation to repay the Funds, and lacked standard loan terms such
as an interest rate and repayment terms, despite the disclosure in the Offering Materials that the
Manager would take steps to ensure that the Receivable documents contain commercially
reasonable terms and conditions.  Instead, many of these related-party transfers were recorded
solely by an entry in the Fund’s accounting records.
37. Finally, for many of these related-party transfers recorded as loans, no interest or
principal payments were ever made.  Indeed, in contravention of the representations made in the
Offering Materials, Defendants never attempted to collect on these purported loans on behalf of
the Funds or to seek other relief outlined in the Offering Materials.
38. As described in paragraphs 36 through 37, the related-party transfers were not
legitimate loans.  Instead the transfers were used by Defendants to divert investor funds to enrich
themselves.
39. Shortly before the Funds were placed into receivership in May 2019, Miles
arranged for his personal bookkeeper to provide an employee of the Manager with a list of
transfers from Fund 600 to an entity Miles controlled.  The employee was asked to create

Complaint                                                            9  Case No.: 3:22-cv-621
backdated promissory notes to document these transfers.  The employee followed the instruction
by creating a backdated note, which Wile signed on behalf of Miles’ entity.
40. Defendants Miles and Wile knew, or were reckless in not knowing, that the
related-party transfers described above were made in contravention of the representations made
in the Offering Materials and that material facts regarding these purported loans were not
disclosed to investors, including that the “loans” lacked basic documentation that Defendants
sought to backdate, were not secured by real estate, did not meet the Funds’ underwriting
standards, and the Manager did not attempt to recoup what the Funds were owed.
iii. Defendants Continued to Raise Money from Investors
41. Through 2018, the Manager, at the direction of Miles and Wile, continued to raise
money from investors using Offering Materials that falsely represented that investor funds would
be used to purchase Receivables.  In fact, as described above and as Miles and Wile knew or
were reckless in not knowing, a significant portion of investor funds were commingled for use by
other funds, used to pay amounts due to other investors or used for unauthorized related-party
loans.
42. From July 2011 through 2018 alone, the Manager raised a total of approximately
$15.5 million from investors (approximately $13.05 million of which was raised in Fund 600),
and investors reinvested approximately $9.1 million when their fund investments came to term.
In May 2019, when the Funds were placed into receivership, the Funds owed investors over
$66 million in principal and interest dating back to 2007, when the Funds became insolvent.
43. At the time Defendants made the misleading statements described above, they
knew, or were reckless in not knowing, that the statements were false and misleading because
they were either untrue or because they omitted material statements that rendered them false in
light of the statements made.
44. Similarly, when Defendants engaged in the deceptive conduct described above,
they did so knowingly or recklessly, with the intent to defraud investors, or potential investors, in
the Funds.

Complaint                                                           10  Case No.: 3:22-cv-621
TOLLING AGREEMENTS
45. During the investigation conducted by the Commission’s staff preceding this
action, Defendants AEI, AEMM and Miles each entered into agreements by which they agreed
that the running of any statute of limitations applicable to any action or proceeding against them
by the Commission, including any sanctions or relief that might be imposed, is tolled and
suspended for the periods November 16, 2020 through May 16, 2021 and November 1, 2021
through May 1, 2022.
46. Also during the investigation, Defendant Wile entered into agreements by which
she agreed that the running of any statute of limitations applicable to any action or proceeding
against her by the Commission, including any sanctions or relief that might be imposed, is tolled
and suspended for the periods December 9, 2020 through June 9, 2021 and October 29, 2021
through April 29, 2022.
FIRST CLAIM FOR RELIEF
(Violations of Section 17(a) of the Securities Act)
47. The Commission realleges and incorporates by reference paragraphs 1 through
46.
48. Defendants AEI, AEMM, Miles and Wile, by engaging in the conduct described
above, directly or indirectly, in the offer or sale of securities, by use of the means or instruments
of transportation or communication in interstate commerce or by use of the mails,
(a) with scienter, employed devices, schemes, or artifices to defraud;
(b) obtained money or property by means of untrue statements of material fact or by
omitting to state a material fact necessary in order to make the statements made,
in light of the circumstances under which they were made, not misleading; and
(c) engaged in transactions, practices, or courses of business which operated or would
operate as a fraud or deceit upon purchasers.

Complaint                                                           11  Case No.: 3:22-cv-621
49. By reason of the foregoing, Defendants AEI, AEMM, Miles and Wile violated,
and unless restrained and enjoined will continue to violate, Section 17(a) of the Securities Act
[15 U.S.C. § 77q(a)].
SECOND CLAIM FOR RELIEF
(Violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder)
50. The Commission realleges and incorporates by reference paragraphs 1 through
46.
51. By engaging in the conduct described above, Defendants AEI, AEMM, Miles and
Wile, in connection with the purchase or sale of securities, directly or indirectly, by the use of the
means or instrumentalities of interstate commerce, or of the mails, or of the facilities of a
national securities exchange, with scienter:
(a) employed devices, schemes, or artifices to defraud;
(b) made untrue statements of material fact or omitted to state material facts
necessary in order to make the statements made, in the light of the circumstances
under which they were made, not misleading; and/or
(c) engaged in acts, practices, or courses of business which operated or would operate
as a fraud or deceit upon other persons, including purchasers and sellers of
securities.
52. By reason of the foregoing, Defendants AEI, AEMM, Miles and Wile violated,
and unless restrained and enjoined will continue to violate, Section 10(b) of the Exchange Act
[15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].
PRAYER FOR RELIEF
WHEREFORE, the Commission respectfully requests that the Court:
I.
Find that each of Defendants AEI, AEMM, Miles and Wile committed the violations
alleged herein;

Complaint                                                           12  Case No.: 3:22-cv-621
II.
Permanently enjoin Defendants AEI, AEMM, Miles and Wile from directly or indirectly
violating Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)], Section 10(b) of the Exchange
Act [15 U.S.C. § 78j(b)] and Rules 10b-5 [17 C.F.R. § 240.10b-5] thereunder;
III.
Order Defendants AEI, AEMM, Miles and Wile to disgorge their ill-gotten gains
according to proof, plus prejudgment interest thereon;
IV.
Order Defendants AEI, AEMM, Miles and Wile to pay civil penalties pursuant to
Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d) of the Exchange Act
[15 U.S.C. § 78u(d)];
V.
Enter a Judgment imposing an officer and director bar against Defendants Miles and Wile
pursuant to Section 20(e) of the Securities Act [15 U.S.C. § 77t(e)] and Section 21(d)(2) of the
Exchange Act [15 U.S.C. § 78u(d)(2)];
VI.
Retain jurisdiction of this action in accordance with the principles of equity and the
Federal Rules of Civil Procedure in order to implement and carry out the terms of all orders and
decrees that may be entered, or to entertain any suitable application or motion for additional
relief within the jurisdiction of this Court; and

Complaint                                                           13  Case No.: 3:22-cv-621
VII.
Grant such other and further relief as this Court may deem just, equitable, and necessary.

Dated:   April 27, 2022   Respectfully submitted:
By:  s/ Bernard B. Smyth
 Bernard B. Smyth (Cal. Bar No. 217741)

Attorney for Plaintiff
SECURITIES AND EXCHANGE
COMMISSION

Complaint 1  Case No.: 3:22-cv-621 

BERNARD B. SMYTH (Cal. Bar No. 217741) 
  [email protected] 
MONIQUE C. WINKLER (Cal. Bar No. 213031) 
JEREMY E. PENDREY (Cal. Bar No. 187075) 
ROBERT J. DURHAM (N.Y. Bar No. 2973022) 
  [email protected]  
KASHYA K. SHEI (Cal. Bar No. 173125) 
  [email protected] 
 
Attorneys for Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 
44 Montgomery Street, Suite 2800 
San Francisco, California 94104-4802 
Telephone:  (415) 705-2500 
Facsimile:  (415) 705-2501 
 

 
 
 
 

UNITED STATES DISTRICT COURT 
 

DISTRICT OF OREGON 
 

PORTLAND DIVISION 
 
 
SECURITIES AND EXCHANGE 
COMMISSION, 
 
                                               Plaintiff, 
 

Case No.: 3:22-cv-621 

v. COMPLAINT 
 

AMERICAN EQUITIES, INC., AMERICAN 
EAGLE MORTGAGE MANAGEMENT, 
LLC, ROSS C. MILES and MAUREEN 
T. WILE, 
 
                                              Defendants. 

 

_____________________________________ 
 

 

 

 

Case 3:22-cv-00621-SB    Document 1    Filed 04/27/22    Page 1 of 13



Complaint 2  Case No.: 3:22-cv-621 

Plaintiff Securities and Exchange Commission (“Commission”) alleges: 

SUMMARY OF THE ACTION 

1. This action concerns a years-long fraud by Defendants American Equities, Inc., 

American Eagle Mortgage Management, LLC, Ross C. Miles and Maureen T. Wile (collectively, 

“Defendants”) on investors in 15 private investment funds (the “Funds”) Defendants managed.  

The Funds were designed to pool investor money, through the sale of promissory notes, to invest 

in mortgages and trust deeds secured by real estate (the “Receivables”), with investor returns to 

be paid primarily from the interest the Receivables generated and the profits made when the 

Receivables were sold.  However, by approximately 2007, the Funds had become insolvent.  In 

order to hide the Funds’ insolvency and keep their enterprise afloat, Defendants improperly 

commingled the Funds’ assets and used new investor money to make payments due to existing 

investors, as in a Ponzi scheme. 

2. Separately, Defendants Miles and Wile misappropriated fund assets by making 

unauthorized payments to themselves, family members and other related parties, which were 

reflected in the Funds’ accounting records as loans.  In actuality, many of these purported loans 

lacked basic documentation such as loan agreements, payment terms and interest rates, and 

violated the Funds’ own underwriting standards.   

3. As many of the purported loans were in fact unauthorized payments to Defendants 

Miles and Wile and parties related to them, approximately $8.7 million remains unpaid and owed 

to the Funds. 

4. From about July 2011 through May 2019, Defendants raised approximately $15.5 

million from investors without disclosing to the investors the insolvent financial condition of the 

Funds and, in contravention to the representations made to investors, Defendants’ misuse of 

investor proceeds.  

5. By May 2019, the enterprise consisting of the 15 Funds managed by Defendants 

collapsed because they were insolvent and unable to make required payments to investors or 

Case 3:22-cv-00621-SB    Document 1    Filed 04/27/22    Page 2 of 13



Complaint 3  Case No.: 3:22-cv-621 

redeem investors as their promissory notes became due.  A Washington State court ordered the 

Funds into receivership.   

6. By their actions, Defendants violated the antifraud provisions of the Securities 

Act of 1933 (“Securities Act”) and the Securities Exchange Act of 1934 (“Exchange Act”) in 

connection with the offer and sale of securities issued by the 15 Funds they managed. 

7. The Commission requests, among other things, that the Court: (i) permanently 

enjoin Defendants from further violating the federal securities laws as alleged in this complaint; 

(ii) prohibit Defendants Miles and Wile from acting as officers or directors of any publicly 

traded company; (iii) order Defendants to pay disgorgement with prejudgment interest; and (iv) 

order Defendants to pay civil monetary penalties. 

JURISDICTION, VENUE AND INTRADISTRICT ASSIGNMENT 

8. This Court has jurisdiction over this action pursuant to Sections 20(b), 20(d) and 

22(a) of the Securities Act [15 U.S.C. §§ 77t(b), 77t(d) and 77v(a)] and Sections 21(d), 21(e) and 

27 of the Exchange Act [15 U.S.C. §§ 78u(d), 78u(e) and 78aa]. 

9. Defendants, directly or indirectly, made use of the means and instruments of 

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

courses of business alleged in this complaint. 

10. Venue in this District is proper pursuant to Section 22(a) of the Securities Act [15 

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

transactions constituting violations alleged in this Complaint, including the fraudulent offer and 

sale of securities to Oregon residents, occurred within the District of Oregon. 

11. Assignment to the Portland Division of this Court is proper because a substantial 

part of the events or omissions that give rise to claims alleged in this Complaint occurred in 

Clackamas, Clatsop, Multnomah and Washington counties, Oregon. 

Case 3:22-cv-00621-SB    Document 1    Filed 04/27/22    Page 3 of 13



Complaint 4  Case No.: 3:22-cv-621 

DEFENDANTS 

12. American Equities, Inc. (“AEI”) is a Washington corporation formed in 1984 and 

located in Vancouver, Washington.  AEI was a manager of 15 Funds that invested in mortgages 

and trust deeds secured by real estate. 

13. American Eagle Mortgage Management, LLC (“AEMM”) is a Washington 

company located in Vancouver, Washington that Defendants Ross C. Miles and Maureen 

T. Wile formed in October 2010 which, in approximately February 2011, assumed AEI’s role as 

the manager of the 15 Funds.  Miles and Wile co-owned AEMM and served as co-managers until 

early 2022, when Wile resigned. 

14. Ross C. Miles (“Miles”), age 72, resides in La Center, Washington.  He is the 

founder, sole owner and president of AEI and co-owner of AEMM.  At all relevant times, Miles 

was ultimately responsible for AEI’s and AEMM’s management of the Funds.   

15. Maureen T. Wile (“Wile”), age 70, resides in Vancouver, Washington.  During 

the events described below, she was the secretary of AEI, co-owner and co-manager of AEMM, 

and ran the operations of both entities in their management of the Funds, including making daily 

decisions about the management of the Funds. 

RELATED ENTITY 

16. American Eagle Mortgage 600, LLC (“Fund 600”) is a Washington company 

formed in 2009 by AEI.  It is the last of the 15 Funds that AEI formed from 2003 through 2009.  

Fund 600, like the others, raised money from investors in exchange for promissory notes that 

carried a fixed interest rate, the amount of which depended on whether the investor chose a one, 

five, ten or fifteen-year investment term.  The promissory notes were sold with accompanying 

ownership interests in Fund 600.  The Private Placement Memorandum (“PPM”) for Fund 600 

stated that Fund 600’s business was to invest in receivables secured by real estate in the United 

States and Mexico.  From 2009 through 2018, Fund 600 raised money from investors in multiple 

states, including dozens in Oregon.  In May 2019, a Washington State court placed Fund 600 and 

the other funds into receivership. 

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Complaint 5  Case No.: 3:22-cv-621 

FACTUAL ALLEGATIONS 

A. Background 

17.   In approximately 2003, Miles and Wile, through AEI, created the first of the 15 

Funds, and offered and sold to investors securities consisting of promissory notes accompanied 

by an ownership interest in that fund. 

18. After the creation of the first fund, approximately every six to twelve months, 

Defendants created a new fund and offered and sold the fund’s securities to investors.  Some of 

the fund offerings overlapped and, by 2009, Defendants had offered and sold securities in 13 

additional funds.  In 2009, Defendants created, and began to offer and sell to investors securities 

of Fund 600, the last of the 15 Funds. 

19. Since 2011, approximately 84 percent of the new cash for investment raised by 

the Funds has been in Fund 600. 

20. Initially, Miles was the person responsible for the daily operations of Defendant 

AEI.  Subsequently, and by at least 2011, Wile took over the day-to-day operations of the Funds, 

first through Defendant AEI and later through Defendant AEMM.  Miles remained the ultimate 

decision maker for Defendants AEI and AEMM (collectively, the “Manager”).  

21. Defendants AEMM and AEI operated in the same office, and most employees 

worked for both entities.   

B. Defendants Miles and Wile Approved and Signed the Offering Materials 

22. With each Fund offering, including Fund 600, the Manager provided investors 

with offering materials, including a PPM, the fund’s Limited Liability Company (“LLC”) 

Agreement, the fund’s Management Agreement, and a list of Minimum Underwriting Criteria for 

Receivables (the “Offering Materials”).   

23. Miles and Wile directed the drafting of the PPMs and approved and reviewed the 

language of the PPMs.  Miles signed both the LLC and Management Agreements, which were 

exhibits to the PPMs, as president of AEI, and Wile signed both agreements as secretary of AEI.   

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Complaint 6  Case No.: 3:22-cv-621 

24. The language of the Offering Materials for the Funds was largely the same, 

varying mostly as to the timing of the offering, the amount sought to be raised, and the location 

of the real estate that secured the fund’s Receivables (e.g., in the U.S., Mexico or both).  

25. According to the Offering Materials, investor funds would “be used exclusively to 

acquire the Receivables, pay the costs associated with the Offering, and cover working capital 

needs of the [fund].”  The Receivables would generate revenue from monthly mortgage 

payments by borrowers, mortgage payoffs and the sale of Receivables, which would be used to 

pay investor returns.   

26. At the time of making their investment, investors had the option to reinvest their 

monthly interest payments, and within 90 days of the end of their investment term, to reinvest the 

principal payments due to them.  Many investors elected one or both of these options. 

27. The Offering Materials described the Manager’s underwriting process and 

provided that the Manager would take steps to ensure that the Receivables were evidenced by 

promissory notes and other documents reflecting the borrower’s obligation to pay and that these 

would contain commercially reasonable terms and conditions.  Each receivable would be secured 

by a single parcel of real property, and meet a certain loan-to-value ratio depending on the type 

of property. 

28. In addition, the Offering Materials provided that the Manager would segregate the 

Funds’ assets and not allow them to be commingled with assets of the Manager or any other 

fund. 

C. The Fraudulent Scheme 
 

i. Defendants Commingled Fund Assets and Made Ponzi-Like Payments to Investors 

29. Since approximately 2008, Wile knew or was reckless in not knowing that the 

Funds were insolvent because she received periodic reports showing the financial condition of 

the Funds, including which funds lacked the cash revenue necessary to make monthly payments 

to investors.  Based on these reports, Wile, in consultation with Miles, directed employees of the 

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Complaint 7  Case No.: 3:22-cv-621 

Manager to transfer money from one fund to other funds in order to make investor payments, 

which resulted in extensive commingling of assets among the Funds.   

30. In approximately 2008, well before the formation of Fund 600, Miles as the 

owner and president of the Manager and the Manager’s ultimate decision maker, knew that the 

Funds were insolvent because he had frequent meetings with Wile and received many of the 

same reports showing the dire financial condition of the Funds.  Miles also knew of the 

commingling of funds and the use of new investor money to pay existing investors. 

31. Although Defendants were aware, by the time Fund 600 was created in 2009, that 

the then-existing funds were insolvent and that investor monies were commingled among the 

Funds, from 2009 through at least 2018, both Miles and Wile continued to raise money from 

investors for Fund 600 and directed the Manager’s employees to continue to raise money from 

investors.   

32. The Offering Materials Defendants provided to Fund 600 investors before they 

made their investments contained false and misleading representations.  For example, the 

Offering Materials falsely stated that investor funds would be used primarily for the purchase of 

Receivables.  In fact, much of the money raised was commingled with the existing funds and 

used to pay interest payments to investors in those other funds. 

33. The Offering Materials Defendants provided to Fund 600 investors also 

prohibited the commingling of money among the Funds and did not permit the use of new 

investor money to pay interest payments due to existing investors.  Nevertheless, as late as 2017, 

Wile specifically instructed an employee of the Manager to raise new investor money for Fund 

600 in order to make payments due to existing investors in the other funds.   

34. Defendants Miles and Wile knew, or were reckless in not knowing, that the assets 

of the Funds were being commingled, that new investor money was being used to pay existing 

investors, and that these actions were not disclosed to investors.  They also knew, or were 

reckless in not knowing, that the Offering Materials were materially false and misleading 

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Complaint 8  Case No.: 3:22-cv-621 

because the Offering Materials provided that assets would not be commingled and that investor 

money was to be used primarily to purchase Receivables.   

ii. Defendants Failed to Disclose Unauthorized Related-Party “Loans” 

35. Since at least approximately 2007, Defendants Miles and Wile caused the Funds 

to make millions of dollars in unauthorized transfers to themselves and parties related to one or 

both of them.  The unauthorized transfers were documented in the Funds’ accounting records as 

loans (hereinafter the purported loans are referred to as “related-party transfers”).  

36. Although the Funds’ accounting records classify the related-party transfers as 

loans, the related-party transfers were not secured by real estate, despite the fact that the Funds 

were designed to use investor money to invest in real estate-backed investments.  In addition, 

many of the related-party transfers lacked basic documentation, such as promissory notes 

evidencing the related party’s obligation to repay the Funds, and lacked standard loan terms such 

as an interest rate and repayment terms, despite the disclosure in the Offering Materials that the 

Manager would take steps to ensure that the Receivable documents contain commercially 

reasonable terms and conditions.  Instead, many of these related-party transfers were recorded 

solely by an entry in the Fund’s accounting records.   

37. Finally, for many of these related-party transfers recorded as loans, no interest or 

principal payments were ever made.  Indeed, in contravention of the representations made in the 

Offering Materials, Defendants never attempted to collect on these purported loans on behalf of 

the Funds or to seek other relief outlined in the Offering Materials.   

38. As described in paragraphs 36 through 37, the related-party transfers were not 

legitimate loans.  Instead the transfers were used by Defendants to divert investor funds to enrich 

themselves. 

39. Shortly before the Funds were placed into receivership in May 2019, Miles 

arranged for his personal bookkeeper to provide an employee of the Manager with a list of 

transfers from Fund 600 to an entity Miles controlled.  The employee was asked to create 

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Complaint 9  Case No.: 3:22-cv-621 

backdated promissory notes to document these transfers.  The employee followed the instruction 

by creating a backdated note, which Wile signed on behalf of Miles’ entity.   

40. Defendants Miles and Wile knew, or were reckless in not knowing, that the 

related-party transfers described above were made in contravention of the representations made 

in the Offering Materials and that material facts regarding these purported loans were not 

disclosed to investors, including that the “loans” lacked basic documentation that Defendants 

sought to backdate, were not secured by real estate, did not meet the Funds’ underwriting 

standards, and the Manager did not attempt to recoup what the Funds were owed.   

iii. Defendants Continued to Raise Money from Investors 

41. Through 2018, the Manager, at the direction of Miles and Wile, continued to raise 

money from investors using Offering Materials that falsely represented that investor funds would 

be used to purchase Receivables.  In fact, as described above and as Miles and Wile knew or 

were reckless in not knowing, a significant portion of investor funds were commingled for use by 

other funds, used to pay amounts due to other investors or used for unauthorized related-party 

loans.   

42. From July 2011 through 2018 alone, the Manager raised a total of approximately 

$15.5 million from investors (approximately $13.05 million of which was raised in Fund 600), 

and investors reinvested approximately $9.1 million when their fund investments came to term.  

In May 2019, when the Funds were placed into receivership, the Funds owed investors over 

$66 million in principal and interest dating back to 2007, when the Funds became insolvent. 

43. At the time Defendants made the misleading statements described above, they 

knew, or were reckless in not knowing, that the statements were false and misleading because 

they were either untrue or because they omitted material statements that rendered them false in 

light of the statements made. 

44. Similarly, when Defendants engaged in the deceptive conduct described above, 

they did so knowingly or recklessly, with the intent to defraud investors, or potential investors, in 

the Funds. 

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Complaint 10  Case No.: 3:22-cv-621 

TOLLING AGREEMENTS 

45. During the investigation conducted by the Commission’s staff preceding this 

action, Defendants AEI, AEMM and Miles each entered into agreements by which they agreed 

that the running of any statute of limitations applicable to any action or proceeding against them 

by the Commission, including any sanctions or relief that might be imposed, is tolled and 

suspended for the periods November 16, 2020 through May 16, 2021 and November 1, 2021 

through May 1, 2022. 

46. Also during the investigation, Defendant Wile entered into agreements by which 

she agreed that the running of any statute of limitations applicable to any action or proceeding 

against her by the Commission, including any sanctions or relief that might be imposed, is tolled 

and suspended for the periods December 9, 2020 through June 9, 2021 and October 29, 2021 

through April 29, 2022. 

FIRST CLAIM FOR RELIEF 

(Violations of Section 17(a) of the Securities Act) 

47. The Commission realleges and incorporates by reference paragraphs 1 through 

46. 

48. Defendants AEI, AEMM, Miles and Wile, by engaging in the conduct described 

above, directly or indirectly, in the offer or sale of securities, by use of the means or instruments 

of transportation or communication in interstate commerce or by use of the mails,  

(a) with scienter, employed devices, schemes, or artifices to defraud; 

(b) obtained money or property by means of untrue statements of material fact or by 

omitting to state a material fact necessary in order to make the statements made, 

in light of the circumstances under which they were made, not misleading; and 

(c) engaged in transactions, practices, or courses of business which operated or would 

operate as a fraud or deceit upon purchasers. 

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Complaint 11  Case No.: 3:22-cv-621 

49. By reason of the foregoing, Defendants AEI, AEMM, Miles and Wile violated, 

and unless restrained and enjoined will continue to violate, Section 17(a) of the Securities Act 

[15 U.S.C. § 77q(a)]. 

SECOND CLAIM FOR RELIEF 

(Violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder) 

50. The Commission realleges and incorporates by reference paragraphs 1 through 

46. 

51. By engaging in the conduct described above, Defendants AEI, AEMM, Miles and 

Wile, in connection with the purchase or sale of securities, directly or indirectly, by the use of the 

means or instrumentalities of interstate commerce, or of the mails, or of the facilities of a 

national securities exchange, with scienter: 

(a) employed devices, schemes, or artifices to defraud; 

(b) made untrue statements of material fact or omitted to state material facts 

necessary in order to make the statements made, in the light of the circumstances 

under which they were made, not misleading; and/or 

(c) engaged in acts, practices, or courses of business which operated or would operate 

as a fraud or deceit upon other persons, including purchasers and sellers of 

securities.  

52. By reason of the foregoing, Defendants AEI, AEMM, Miles and Wile violated, 

and unless restrained and enjoined will continue to violate, Section 10(b) of the Exchange Act 

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

PRAYER FOR RELIEF 

WHEREFORE, the Commission respectfully requests that the Court: 

I. 

Find that each of Defendants AEI, AEMM, Miles and Wile committed the violations 

alleged herein; 

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Complaint 12  Case No.: 3:22-cv-621 

II. 

Permanently enjoin Defendants AEI, AEMM, Miles and Wile from directly or indirectly 

violating Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)], Section 10(b) of the Exchange 

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

III. 

Order Defendants AEI, AEMM, Miles and Wile to disgorge their ill-gotten gains 

according to proof, plus prejudgment interest thereon; 

IV. 

Order Defendants AEI, AEMM, Miles and Wile to pay civil penalties pursuant to 

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

[15 U.S.C. § 78u(d)]; 

V. 

Enter a Judgment imposing an officer and director bar against Defendants Miles and Wile 

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

Exchange Act [15 U.S.C. § 78u(d)(2)]; 

VI. 

Retain jurisdiction of this action in accordance with the principles of equity and the 

Federal Rules of Civil Procedure in order to implement and carry out the terms of all orders and 

decrees that may be entered, or to entertain any suitable application or motion for additional 

relief within the jurisdiction of this Court; and 

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Complaint 13  Case No.: 3:22-cv-621 

VII. 

Grant such other and further relief as this Court may deem just, equitable, and necessary. 

 

Dated:   April 27, 2022   Respectfully submitted: 

By:  s/ Bernard B. Smyth                      
 Bernard B. Smyth (Cal. Bar No. 217741) 

 
Attorney for Plaintiff  
SECURITIES AND EXCHANGE 
COMMISSION 

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