SEC v. Blessing K. Egbon, No. 2:21-cv-00935-SCD, Eastern District of Wisconsin (Aug. 10, 2021) — Complaint

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
MILWAUKEE DIVISION

__________________________________________
:
UNITED STATES SECURITIES     :
AND EXCHANGE COMMISSION,  :
                                                                                                                        :            Case            No.            2:21-cv-935
    Plaintiff,   :
          v.     : Jury Trial Demanded
       :
BLESSING            K.            EGBON,                                                :
        :
   Defendant.   :
__________________________________________:

COMPLAINT
Plaintiff, the United States Securities and Exchange Commission (“SEC”) alleges as
follows:
SUMMARY OF THE ACTION
1. The SEC brings this action against Defendant Blessing K. Egbon (“Egbon”), the
former CEO of the Milwaukee, Wisconsin fuel services company Exit 7C, Inc. (“Exit 7C”), for
making false and misleading statements and misappropriating approximately $2.15 million from
investors in Exit 7C.  Between August 2016 and March 2020, Egbon offered and sold $6.47
million in securities to at least 14 investors by providing the investors with fictitious revenue and
profit figures and forged bank statements for Exit 7C.  Shortly after receiving the investors’
funds, Egbon began misappropriating the money and spending it on various personal expenses,
including visits to nightclubs, chartered jets, villa rentals, and tickets to sporting events.
2. By engaging in this conduct, Egbon violated Section 17(a) of the Securities Act of
1933 (the “Securities Act”) [15 U.S.C. § 77q(a)] and Section 10(b) of the Securities Exchange
Act of 1934 (the “Exchange Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R.

240.10b-5].  The SEC brings this action to hold Egbon accountable for his illegal conduct,
permanently enjoin him from further violations of the federal securities laws, and to seek an
officer and director bar, a penny stock bar, disgorgement and prejudgment interest, and civil
penalties.
JURISDICTION AND VENUE
3. The Court has jurisdiction over this action pursuant to Sections 20 and 22 of the
Securities Act [15 U.S.C. §§ 77t and 77v] and Sections 21 and 27 of the Exchange Act [15
U.S.C. §§ 78u and 78aa].
4. Venue is proper in this Court pursuant to Section 22 of the Securities Act [15
U.S.C. § 77v] and Section 27 of the Exchange Act [15 U.S.C. §78aa] because certain of the acts,
practices, and courses of business constituting the violations alleged in this Complaint occurred
within the jurisdiction of the United States District Court for the Eastern District of Wisconsin.
In addition, during the relevant time period, Egbon resided and conducted business within the
Eastern District of Wisconsin.
5. Egbon, directly or indirectly, made use of the means or instruments of
transportation or communication in interstate commerce, or the means or instrumentalities of
interstate commerce, or of the mails, or of any facility of any national securities exchange in
connection with the acts, practices, and courses of business alleged herein.
6. Egbon will, unless enjoined, continue to engage in the acts, practices,
transactions, and courses of business set forth in this Complaint, or in similar acts, practices,
transactions, and courses of business.

DEFENDANT
7. Blessing K. Egbon, age 34, resides in Milwaukee, Wisconsin.  Egbon founded
Exit 7C’s predecessor company in November 2015 and changed its name to Exit 7C in October
2016.  Egbon served as Exit 7C’s CEO from its inception until his resignation in July 2020.
OTHER RELEVANT ENTITY
8. Exit 7C, Inc. was incorporated in Colorado in November 2015 under the name
CoOp Fuels, Inc., with headquarters in Morrisville, North Carolina.  The company’s stated goal
was to provide ethanol-based fuel to gas stations throughout the United States on a consignment
basis.  In October 2016, Egbon changed the company’s name to Exit 7C, converted it into a
Delaware corporation, and moved its headquarters to Milwaukee, Wisconsin.  In July 2020, Exit
7C began winding down its operations.  It was dissolved in October 2020.
FACTS
9. Egbon founded Exit 7C in November 2015 as CoOp Fuels, Inc. and was its sole
Chief Executive Officer (CEO).  In October 2016, Egbon changed the company’s name to Exit
7C and moved it to Milwaukee, Wisconsin.  Around the same time, Egbon also expanded the
company’s business goals to include providing bulk fuel to gas stations, offering a mobile
payment platform for gas purchases, and providing maintenance services to vehicle fleets.  As
Exit 7C’s CEO, Egbon had exclusive control over the company and its finances.
10. From 2015 to 2020, Exit 7C generated approximately $400,000 in gross revenue
and never made a profit.  Almost all of the company’s revenue came from providing
maintenance services to commercial vehicle fleets and was generated between October 2018 and
July 2020.

Egbon Misled Investors and Misappropriated Investor Funds
11. In mid-2016, Egbon applied for Exit 7C to participate in an accelerator program
for start-up companies run by a Wisconsin-based venture capital firm that invests in high-growth
start-up companies (“Firm A”).  During the application and interview process, Egbon falsely
represented to Firm A through emails that Exit 7C was generating cash flows of $15,000 per
month and that its ethanol delivery business was profitable.  In fact, Exit 7C was not earning any
revenue at the time.  Based on Egbon’s misrepresentations, Firm A invited Exit 7C to join its
accelerator program, one of only six companies out of hundreds that applied.  Firm A provided
Egbon with hands-on mentorship regarding how to develop Exit 7C’s business, and invested
$90,000 in the company in August 2016 through purchases of two convertible notes.
12. One of Egbon’s mentors in Firm A’s accelerator program (“Individual Investor
A”) also invested $25,000 in Exit 7C via a convertible note based on the false information that
Egbon supplied to Firm A.
13. Additionally, a non-profit organization focused on helping early stage Wisconsin
businesses invested $50,000 in Exit 7C through a convertible note in March 2017 based on
information provided to it by Firm A.
14. Rather than using these investor funds to develop Exit 7C, as Egbon represented,
Egbon spent most of these funds on his personal expenses.
15. Beginning in January 2017, Egbon began emailing monthly newsletters to
existing and potential Exit 7C investors that contained false information regarding Exit 7C’s
finances and growth.  The newsletters falsely portrayed Exit 7C as a successful, fast-growing
company.  For example, Egbon sent out an email newsletter on January 31, 2017 that stated that
Exit 7C made $53,959.03 in gross fuel sales and $2,158.36 in revenue in January 2017, when in

fact Exit 7C made no money during that month.  Based, at least in part, on the false financial
information in the newsletters, Individual Investor A invested an additional $35,000 in Exit 7C
common stock in January 2018.
16. In mid-2018, Egbon applied for an investment from a Wisconsin non-profit
organization that supports minority entrepreneurs.  Egbon drafted and submitted an application
that contained fake monthly sales figures and financial projections, and Egbon falsely told the
organization that Exit 7C had a valuation of $2.2 million.  Based on the information provided by
Egbon, the organization invested $50,000 in an Exit 7C convertible note in August 2018.
17. Also in mid-2018, Egbon solicited a California-based venture capital firm (“Firm
B”) to invest in Exit 7C.  Egbon provided Firm B with extensive due diligence materials that
contained false financial information, including forged bank statements, fake balance sheets, fake
income statements, and a presentation deck drafted by Egbon that contained fictitious sales,
profit, and EBITDA figures for 2017.  On August 1, 2018, in reliance on the false information
provided by Egbon, Firm B invested $200,000 in an Exit 7C convertible note on behalf of a fund
it managed.
18. Shortly after investing in Exit 7C, Firm B’s managing director introduced Egbon
to the principals of three other venture capital firms who were his frequent investing partners.
Firm B provided each of the firms with the presentation deck prepared by Egbon and gave them
an overview of the financial information that Egbon had provided to Firm B as part of its due
diligence.  All of the financial information was fictitious.  Egbon also provided the three firms
with access to a virtual data room that contained the same fake due diligence documents that he
had previously given to Firm B, including the forged bank statements.  Based on this
information, the three firms invested $75,000, $50,000, and $50,000, respectively, in Exit 7C

convertible notes.  A limited partner in an investment fund controlled by one of the three firms
also invested another $50,000 in an Exit 7C convertible note based on the false due diligence
information.
19. In August 2018, investing partners of Firm B introduced Egbon to the principals
of two additional investment firms, who spoke with Egbon and reviewed the fake financial
information contained in Egbon’s presentation deck as well as the fake due diligence documents
that Egbon gave them through his virtual data room.  Based on the information provided by
Egbon, each firm invested $100,000 in Exit 7C convertible notes.
20. In September 2018, another venture capital firm invested $100,000 in an Exit 7C
convertible note based upon its review of numerous due diligence documents given to them by
Egbon that contained false financial statements, including bank statements, income and balance
statements, and the presentation deck that Egbon drafted.
21. Egbon continued to send current and prospective investors monthly newsletters
that contained fabricated financial information and gave the false impression that Exit 7C was a
profitable, growing company until July 2020.  Although Exit 7C generated some gross revenue
from providing maintenance services to commercial vehicle fleets in late 2018 and early 2019,
the company’s expenses far exceeded the revenue generated, and Egbon continued to
misappropriate investor funds in order to subsidize his own lifestyle and personal expenses
throughout this time.
22. In June 2019, Firm B, through another fund that it managed, invested an
additional $500,000 in Exit 7C via a purchase of preferred stock.  As before, Egbon provided
Firm B with false due diligence materials, including forged bank statements, a forged federal tax
return, fake income and balance statements, and false monthly profit and loss tables.

23. In March 2020, an international venture capital firm (“Firm C”) invested
approximately $5 million in Exit 7C through a purchase of preferred stock.  As with past
investors, Egbon provided Firm C with false due diligence materials, including forged monthly
bank statements and an investor presentation deck that fraudulently represented that Exit 7C had
gross sales of $79.5 million, gross profit of $6.35 million, and EBITDA of $2.61 million in 2019.
In reality, Exit 7C made less than $300,000 in gross revenue in 2019 and was not profitable that
year.  Egbon also provided Firm C with a term sheet that falsely represented that proceeds from
its investment would be used “to enter new markets, expand capabilities within existing markets,
further develop technology capabilities, hire key management team members, and for general
working capital purposes and general corporate expenses.”
24. In reality, upon receiving Firm C’s investment, Egbon immediately began
spending the funds on personal expenses, including chartering a private jet to travel to a luxury
villa he rented in Arizona and purchasing large amounts of alcohol at the beginning of the
COVID-19 pandemic in spring 2020.
Egbon’s Uses of Investor Funds
25. Egbon misappropriated approximately $2.15 million of the $6.47 million that he
raised from investors.  Of that amount, Egbon spent over $530,000 on luxury nightclub visits,
over $269,900 on chartered jets, at least $88,800 on various credit card purchases, and $62,500
on villa rentals.  Egbon also spent investor funds on sporting events and other personal expenses,
including spending hundreds of thousands of dollars on his day-to-day living expenses.  In
addition, Egbon paid himself approximately $360,000 through direct transfers, payroll deposits,
and cash withdrawals.

Egbon’s Fraud Unraveled
26. In July 2020, after learning of Egbon’s possible misconduct, Exit 7C’s board of
directors restricted Egbon’s access to company funds and began conducting an internal
investigation.  Based on the results of the internal investigation, Exit 7C’s board asked Egbon to
resign from the company and the board.  In October 2020, Exit 7C’s board dissolved the
company, withdrew its corporate registration, and distributed its remaining funds to investors.
COUNT ONE
Violations of Sections 17(a) of the Securities Act
[15 U.S.C. § 77q(a)]

27. The SEC realleges and incorporates by reference paragraphs 1 through 26.
28. Egbon knowingly or recklessly, or, with respect to subparts b and c below,
negligently, in the offer or sale of securities, by the use of the means and instruments of
transportation or communication in interstate commerce, or by the use of the mails, directly or
indirectly:
a. employed devices, schemes, and artifices to defraud;
b. obtained money or property by means of an untrue statement of material
fact or omitted 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 operate or
would operate as a fraud or deceit upon the purchasers and prospective
purchasers of such securities.
29. By engaging in the foregoing conduct, Egbon violated, and unless restrained and
enjoined will continue to violate, Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)].

COUNT TWO
Violations of 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]

30. The SEC realleges and incorporates by reference paragraphs 1 through 26.
31. Egbon knowingly or recklessly, in connection with the purchase or sale of
securities, directly or indirectly, by the use of the means and instrumentalities of interstate
commerce, or of the mails, or of any facility of any national securities exchange:
a. used or 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
c. engaged in acts, practices, or courses of business which operated or would
operate as a fraud and deceit upon any person in connection with the
purchase or sale of any security.
32. By engaging in the foregoing conduct, Egbon violated, and unless restrained or
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].
RELIEF REQUESTED
WHEREFORE, the SEC respectfully requests that this Court:
I.
Issue findings of fact and conclusions of law that Egbon committed the violations
charged and alleged herein.

II.
Enter an Order of Permanent Injunction restraining and enjoining Egbon, his officers,
agents, servants, employees, attorneys, and those persons in active concert or participation with
Egbon who receive actual notice of the Order, by personal service or otherwise, and each of them
from, directly or indirectly, engaging in the transactions, acts, practices, or courses of business
described above, or in conduct of similar purport and object, in violation of Section 17(a) of the
Securities Act [15 U.S.C. § 77q(a)] and Section 10(b) of the Exchange Act [15 U.S.C. § 78j] and
Rule 10b-5 thereunder [17 CFR § 240.10b-5].
III.
 Order Egbon to disgorge the ill-gotten gains that he received as a result of the violations
alleged in this Complaint, plus prejudgment interest, pursuant to Sections 21(d)(5) and 21(d)(7)
of the Exchange Act [15 U.S.C. §§ 78u(d)(5) and 78u(d)(7)].
IV.
 Order Egbon to pay civil penalties pursuant to Section 20(d) of the Securities Act [15
U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)].
V.
 Pursuant to Section 20(g) of the Securities Act [15 U.S.C. § 77t(g)] and Section 21(d)(6)
of the Exchange Act [15 U.S.C. § 78u(d)(6)], bar Egbon from participating in an offering of
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.
VI.
 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)], prohibit Egbon from acting as an officer or director

of any issuer that has a class of securities registered pursuant to Section 12 of the Exchange Act
[15 U.S.C. § 78l] or that is required to file reports pursuant to Section 15(d) of the Exchange Act
[15 U.S.C. § 78o(d)].
VII.
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 applications or motions for additional
relief within the Court’s jurisdiction.
VIII.
Grant such other and further relief as the Court deems appropriate.
JURY DEMAND
Pursuant to Rule 38 of the Federal Rules of Civil Procedure, the SEC hereby requests a
trial by jury on all issues so triable.

Dated:  August 10, 2021  Respectfully Submitted,
UNITED STATES SECURITIES AND
EXCHANGE COMMISSION

     s/ Som P. Dalal        ______
  John E. Birkenheier, Illinois Bar No. 6270993
Anne C. McKinley, Illinois Bar No. 6270252
     Som P. Dalal, Illinois Bar No. 6296172
Attorneys for Plaintiff
                        United            States            Securities and Exchange Commission
                        Chicago            Regional            Office
         175 West Jackson Blvd., Suite 1450
         Chicago, Illinois 60604
         Telephone:  (312) 353-7390
                                                Fax:                        (312)            353-7398
[email protected]
[email protected]
[email protected]

UNITED STATES DISTRICT COURT 
EASTERN DISTRICT OF WISCONSIN 

MILWAUKEE DIVISION 
 
__________________________________________ 

:   
UNITED STATES SECURITIES   :  
AND EXCHANGE COMMISSION,  :  
          : Case No. 2:21-cv-935 
    Plaintiff,   : 
          v.     : Jury Trial Demanded 
       :  
BLESSING K. EGBON,    : 
        :  
   Defendant.   :    
__________________________________________: 
 

COMPLAINT 

Plaintiff, the United States Securities and Exchange Commission (“SEC”) alleges as 

follows: 

SUMMARY OF THE ACTION 

1. The SEC brings this action against Defendant Blessing K. Egbon (“Egbon”), the 

former CEO of the Milwaukee, Wisconsin fuel services company Exit 7C, Inc. (“Exit 7C”), for 

making false and misleading statements and misappropriating approximately $2.15 million from 

investors in Exit 7C.  Between August 2016 and March 2020, Egbon offered and sold $6.47 

million in securities to at least 14 investors by providing the investors with fictitious revenue and 

profit figures and forged bank statements for Exit 7C.  Shortly after receiving the investors’ 

funds, Egbon began misappropriating the money and spending it on various personal expenses, 

including visits to nightclubs, chartered jets, villa rentals, and tickets to sporting events.   

2. By engaging in this conduct, Egbon violated Section 17(a) of the Securities Act of 

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

Act of 1934 (the “Exchange Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. 

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240.10b-5].  The SEC brings this action to hold Egbon accountable for his illegal conduct, 

permanently enjoin him from further violations of the federal securities laws, and to seek an 

officer and director bar, a penny stock bar, disgorgement and prejudgment interest, and civil 

penalties. 

JURISDICTION AND VENUE 

3. The Court has jurisdiction over this action pursuant to Sections 20 and 22 of the 

Securities Act [15 U.S.C. §§ 77t and 77v] and Sections 21 and 27 of the Exchange Act [15 

U.S.C. §§ 78u and 78aa]. 

4. Venue is proper in this Court pursuant to Section 22 of the Securities Act [15 

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

practices, and courses of business constituting the violations alleged in this Complaint occurred 

within the jurisdiction of the United States District Court for the Eastern District of Wisconsin.  

In addition, during the relevant time period, Egbon resided and conducted business within the 

Eastern District of Wisconsin. 

5. Egbon, directly or indirectly, made use of the means or instruments of 

transportation or communication in interstate commerce, or the means or instrumentalities of 

interstate commerce, or of the mails, or of any facility of any national securities exchange in 

connection with the acts, practices, and courses of business alleged herein. 

6. Egbon will, unless enjoined, continue to engage in the acts, practices, 

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

transactions, and courses of business. 

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DEFENDANT 

7. Blessing K. Egbon, age 34, resides in Milwaukee, Wisconsin.  Egbon founded 

Exit 7C’s predecessor company in November 2015 and changed its name to Exit 7C in October 

2016.  Egbon served as Exit 7C’s CEO from its inception until his resignation in July 2020. 

OTHER RELEVANT ENTITY 

8. Exit 7C, Inc. was incorporated in Colorado in November 2015 under the name 

CoOp Fuels, Inc., with headquarters in Morrisville, North Carolina.  The company’s stated goal 

was to provide ethanol-based fuel to gas stations throughout the United States on a consignment 

basis.  In October 2016, Egbon changed the company’s name to Exit 7C, converted it into a 

Delaware corporation, and moved its headquarters to Milwaukee, Wisconsin.  In July 2020, Exit 

7C began winding down its operations.  It was dissolved in October 2020.  

FACTS 

9. Egbon founded Exit 7C in November 2015 as CoOp Fuels, Inc. and was its sole 

Chief Executive Officer (CEO).  In October 2016, Egbon changed the company’s name to Exit 

7C and moved it to Milwaukee, Wisconsin.  Around the same time, Egbon also expanded the 

company’s business goals to include providing bulk fuel to gas stations, offering a mobile 

payment platform for gas purchases, and providing maintenance services to vehicle fleets.  As 

Exit 7C’s CEO, Egbon had exclusive control over the company and its finances.   

10. From 2015 to 2020, Exit 7C generated approximately $400,000 in gross revenue 

and never made a profit.  Almost all of the company’s revenue came from providing 

maintenance services to commercial vehicle fleets and was generated between October 2018 and 

July 2020.   

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Egbon Misled Investors and Misappropriated Investor Funds 

11. In mid-2016, Egbon applied for Exit 7C to participate in an accelerator program 

for start-up companies run by a Wisconsin-based venture capital firm that invests in high-growth 

start-up companies (“Firm A”).  During the application and interview process, Egbon falsely 

represented to Firm A through emails that Exit 7C was generating cash flows of $15,000 per 

month and that its ethanol delivery business was profitable.  In fact, Exit 7C was not earning any 

revenue at the time.  Based on Egbon’s misrepresentations, Firm A invited Exit 7C to join its 

accelerator program, one of only six companies out of hundreds that applied.  Firm A provided 

Egbon with hands-on mentorship regarding how to develop Exit 7C’s business, and invested 

$90,000 in the company in August 2016 through purchases of two convertible notes.   

12. One of Egbon’s mentors in Firm A’s accelerator program (“Individual Investor 

A”) also invested $25,000 in Exit 7C via a convertible note based on the false information that 

Egbon supplied to Firm A. 

13. Additionally, a non-profit organization focused on helping early stage Wisconsin 

businesses invested $50,000 in Exit 7C through a convertible note in March 2017 based on 

information provided to it by Firm A. 

14. Rather than using these investor funds to develop Exit 7C, as Egbon represented, 

Egbon spent most of these funds on his personal expenses.  

15. Beginning in January 2017, Egbon began emailing monthly newsletters to 

existing and potential Exit 7C investors that contained false information regarding Exit 7C’s 

finances and growth.  The newsletters falsely portrayed Exit 7C as a successful, fast-growing 

company.  For example, Egbon sent out an email newsletter on January 31, 2017 that stated that 

Exit 7C made $53,959.03 in gross fuel sales and $2,158.36 in revenue in January 2017, when in 

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fact Exit 7C made no money during that month.  Based, at least in part, on the false financial 

information in the newsletters, Individual Investor A invested an additional $35,000 in Exit 7C 

common stock in January 2018. 

16. In mid-2018, Egbon applied for an investment from a Wisconsin non-profit 

organization that supports minority entrepreneurs.  Egbon drafted and submitted an application 

that contained fake monthly sales figures and financial projections, and Egbon falsely told the 

organization that Exit 7C had a valuation of $2.2 million.  Based on the information provided by 

Egbon, the organization invested $50,000 in an Exit 7C convertible note in August 2018. 

17. Also in mid-2018, Egbon solicited a California-based venture capital firm (“Firm 

B”) to invest in Exit 7C.  Egbon provided Firm B with extensive due diligence materials that 

contained false financial information, including forged bank statements, fake balance sheets, fake 

income statements, and a presentation deck drafted by Egbon that contained fictitious sales, 

profit, and EBITDA figures for 2017.  On August 1, 2018, in reliance on the false information 

provided by Egbon, Firm B invested $200,000 in an Exit 7C convertible note on behalf of a fund 

it managed.   

18. Shortly after investing in Exit 7C, Firm B’s managing director introduced Egbon 

to the principals of three other venture capital firms who were his frequent investing partners.  

Firm B provided each of the firms with the presentation deck prepared by Egbon and gave them 

an overview of the financial information that Egbon had provided to Firm B as part of its due 

diligence.  All of the financial information was fictitious.  Egbon also provided the three firms 

with access to a virtual data room that contained the same fake due diligence documents that he 

had previously given to Firm B, including the forged bank statements.  Based on this 

information, the three firms invested $75,000, $50,000, and $50,000, respectively, in Exit 7C 

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convertible notes.  A limited partner in an investment fund controlled by one of the three firms 

also invested another $50,000 in an Exit 7C convertible note based on the false due diligence 

information.   

19. In August 2018, investing partners of Firm B introduced Egbon to the principals 

of two additional investment firms, who spoke with Egbon and reviewed the fake financial 

information contained in Egbon’s presentation deck as well as the fake due diligence documents 

that Egbon gave them through his virtual data room.  Based on the information provided by 

Egbon, each firm invested $100,000 in Exit 7C convertible notes.   

20. In September 2018, another venture capital firm invested $100,000 in an Exit 7C 

convertible note based upon its review of numerous due diligence documents given to them by 

Egbon that contained false financial statements, including bank statements, income and balance 

statements, and the presentation deck that Egbon drafted. 

21. Egbon continued to send current and prospective investors monthly newsletters 

that contained fabricated financial information and gave the false impression that Exit 7C was a 

profitable, growing company until July 2020.  Although Exit 7C generated some gross revenue 

from providing maintenance services to commercial vehicle fleets in late 2018 and early 2019, 

the company’s expenses far exceeded the revenue generated, and Egbon continued to 

misappropriate investor funds in order to subsidize his own lifestyle and personal expenses 

throughout this time.  

22. In June 2019, Firm B, through another fund that it managed, invested an 

additional $500,000 in Exit 7C via a purchase of preferred stock.  As before, Egbon provided 

Firm B with false due diligence materials, including forged bank statements, a forged federal tax 

return, fake income and balance statements, and false monthly profit and loss tables.   

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23. In March 2020, an international venture capital firm (“Firm C”) invested 

approximately $5 million in Exit 7C through a purchase of preferred stock.  As with past 

investors, Egbon provided Firm C with false due diligence materials, including forged monthly 

bank statements and an investor presentation deck that fraudulently represented that Exit 7C had 

gross sales of $79.5 million, gross profit of $6.35 million, and EBITDA of $2.61 million in 2019.  

In reality, Exit 7C made less than $300,000 in gross revenue in 2019 and was not profitable that 

year.  Egbon also provided Firm C with a term sheet that falsely represented that proceeds from 

its investment would be used “to enter new markets, expand capabilities within existing markets, 

further develop technology capabilities, hire key management team members, and for general 

working capital purposes and general corporate expenses.”   

24. In reality, upon receiving Firm C’s investment, Egbon immediately began 

spending the funds on personal expenses, including chartering a private jet to travel to a luxury 

villa he rented in Arizona and purchasing large amounts of alcohol at the beginning of the 

COVID-19 pandemic in spring 2020. 

Egbon’s Uses of Investor Funds 

25. Egbon misappropriated approximately $2.15 million of the $6.47 million that he 

raised from investors.  Of that amount, Egbon spent over $530,000 on luxury nightclub visits, 

over $269,900 on chartered jets, at least $88,800 on various credit card purchases, and $62,500 

on villa rentals.  Egbon also spent investor funds on sporting events and other personal expenses, 

including spending hundreds of thousands of dollars on his day-to-day living expenses.  In 

addition, Egbon paid himself approximately $360,000 through direct transfers, payroll deposits, 

and cash withdrawals. 

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Egbon’s Fraud Unraveled 

26. In July 2020, after learning of Egbon’s possible misconduct, Exit 7C’s board of 

directors restricted Egbon’s access to company funds and began conducting an internal 

investigation.  Based on the results of the internal investigation, Exit 7C’s board asked Egbon to 

resign from the company and the board.  In October 2020, Exit 7C’s board dissolved the 

company, withdrew its corporate registration, and distributed its remaining funds to investors. 

COUNT ONE 

Violations of Sections 17(a) of the Securities Act 
[15 U.S.C. § 77q(a)] 

 
27. The SEC realleges and incorporates by reference paragraphs 1 through 26. 

28. Egbon knowingly or recklessly, or, with respect to subparts b and c below, 

negligently, in the offer or sale of securities, by the use of the means and instruments of 

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

indirectly:   

a. employed devices, schemes, and artifices to defraud;  

b. obtained money or property by means of an untrue statement of material 

fact or omitted 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 operate or 

would operate as a fraud or deceit upon the purchasers and prospective 

purchasers of such securities. 

29. By engaging in the foregoing conduct, Egbon violated, and unless restrained and 

enjoined will continue to violate, Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)]. 

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COUNT TWO 

Violations of 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] 

  
30. The SEC realleges and incorporates by reference paragraphs 1 through 26. 

31. Egbon knowingly or recklessly, in connection with the purchase or sale of 

securities, directly or indirectly, by the use of the means and instrumentalities of interstate 

commerce, or of the mails, or of any facility of any national securities exchange:   

a. used or 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  

c. engaged in acts, practices, or courses of business which operated or would 

operate as a fraud and deceit upon any person in connection with the 

purchase or sale of any security. 

32. By engaging in the foregoing conduct, Egbon violated, and unless restrained or 

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]. 

RELIEF REQUESTED 

WHEREFORE, the SEC respectfully requests that this Court: 

I. 

Issue findings of fact and conclusions of law that Egbon committed the violations 

charged and alleged herein. 

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II. 

Enter an Order of Permanent Injunction restraining and enjoining Egbon, his officers, 

agents, servants, employees, attorneys, and those persons in active concert or participation with 

Egbon who receive actual notice of the Order, by personal service or otherwise, and each of them 

from, directly or indirectly, engaging in the transactions, acts, practices, or courses of business 

described above, or in conduct of similar purport and object, in violation of Section 17(a) of the 

Securities Act [15 U.S.C. § 77q(a)] and Section 10(b) of the Exchange Act [15 U.S.C. § 78j] and 

Rule 10b-5 thereunder [17 CFR § 240.10b-5].  

III. 

 Order Egbon to disgorge the ill-gotten gains that he received as a result of the violations 

alleged in this Complaint, plus prejudgment interest, pursuant to Sections 21(d)(5) and 21(d)(7) 

of the Exchange Act [15 U.S.C. §§ 78u(d)(5) and 78u(d)(7)].  

IV. 

 Order Egbon to pay civil penalties pursuant to Section 20(d) of the Securities Act [15 

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

V. 

 Pursuant to Section 20(g) of the Securities Act [15 U.S.C. § 77t(g)] and Section 21(d)(6) 

of the Exchange Act [15 U.S.C. § 78u(d)(6)], bar Egbon from participating in an offering of 

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. 

VI. 

 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)], prohibit Egbon from acting as an officer or director 

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of any issuer that has a class of securities registered pursuant to Section 12 of the Exchange Act 

[15 U.S.C. § 78l] or that is required to file reports pursuant to Section 15(d) of the Exchange Act 

[15 U.S.C. § 78o(d)]. 

VII. 

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 applications or motions for additional 

relief within the Court’s jurisdiction.  

VIII. 

Grant such other and further relief as the Court deems appropriate. 

JURY DEMAND 

Pursuant to Rule 38 of the Federal Rules of Civil Procedure, the SEC hereby requests a 

trial by jury on all issues so triable.  

  

Dated:  August 10, 2021  Respectfully Submitted,  

UNITED STATES SECURITIES AND  
EXCHANGE COMMISSION 

              
    s/ Som P. Dalal        ______  
 John E. Birkenheier, Illinois Bar No. 6270993 
Anne C. McKinley, Illinois Bar No. 6270252 

     Som P. Dalal, Illinois Bar No. 6296172 
Attorneys for Plaintiff 

  United States Securities and Exchange Commission 
  Chicago Regional Office 

         175 West Jackson Blvd., Suite 1450 
         Chicago, Illinois 60604 
         Telephone:  (312) 353-7390  
    Fax:  (312) 353-7398 

[email protected] 
[email protected] 
[email protected] 

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