SEC v. Teshuater, LLC; Larry Donnell Leonard, II; Shuwana Leonard; and Teshua Business Group, LLC, No. 4:20-cv-01187, Southern District of Texas (Apr. 3, 2020) — Complaint

COMPLAINT  PAGE 1 OF 16
SEC
 V. TESHUATER, ET AL.
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
________________________________________________
SECURITIES AND EXCHANGE COMMISSION, §
        §
 Plaintiff,      §
        §
vs.        §
        §  Civil Action No.:
TESHUATER, LLC, LARRY DONNELL    §
LEONARD, II, SHUWANA LEONARD, and  §
TESHUA BUSINESS GROUP, LLC,   §
        §
 Defendants.         §
________________________________________________§

COMPLAINT
Plaintiff  Securities  and  Exchange  Commission  (“Commission”)  files  this  Complaint
against Defendants Teshuater, LLC (“Teshuater”), Larry Donnell Leonard, II (“Larry Leonard”),
Shuwana Leonard (“Shuwana Leonard”), and Teshua Business Group, LLC (“TBG”) (collectively
“Defendants”), and alleges as follows:
I.
SUMMARY
1. Since at least 2017, Larry Leonard, individually and through Teshuater and TBG,
along with his wife, Shuwana Leonard, targeted investors in the African-American community by
promising oversized returns on various investments related to Teshuater, a business that bottled
and  distributed  alkaline  water.    During  the  course  of  this  scheme,  Defendants  raised  nearly
$500,000  from  over  500  investors  through materially false  and  misleading  statements  and
omissions and other deceptive conduct.
2. Defendants  perpetrated  their  fraud  through  three separate offerings.    First, Larry
Leonard, Shuwana Leonard, and Teshuater offered and sold worthless “stock certificates” that did

COMPLAINT  PAGE 2 OF 16
SEC
 V. TESHUATER, ET AL.
not actually convey ownership interest in Teshuater.      Larry Leonard also promised investors,  who
purchased  Teshuater  stock,   short-term  investment  returns  of  up  to  3,000%.    Second, Larry
Leonard, individually and on behalf of Teshuater,  fraudulently sold “TeshuaCoins,” a purported
cryptocurrency  issued  by  Teshuater.    Among  other  things,  he  lied  about  the  usability  of
TeshuaCoins and falsely claimed that TeshuaCoins were backed by real assets owned by Teshuater
(i.e., the bottled water sold by the company).  Finally, Larry Leonard,  individually and on behalf
of Teshuater, peddled investments in a purported high-yield, short-term Bitcoin-mining
1
 program.
The Bitcoin-mining program, however, never existed.
3. After commingling  investor  funds  in  TBG’s  and  Teshuater’s  bank  accounts  with
funds  from  unrelated  and  undisclosed  business  ventures,  the  Leonards  then used these  funds to
fund other business ventures and to pay for their personal expenses.
4. By  committing  the  acts  alleged  in  this  Complaint,  Defendants  directly  and
indirectly engaged in, and unless restrained and enjoined by the Court will continue to engage in,
acts, transactions, practices, and courses of business that violate certain antifraud provisions of the
federal securities laws; specifically,  Section 17(a) of the Securities Act of 1933 (“Securities Act”)
[15 U.S.C. § 77q(a)] and 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].  Larry Leonard, Shuwana
Leonard, and Teshuater also violated the securities-registration provisions, including Sections 5(a)
and  5(c)  of  the  Securities  Act  [15  U.S.C.  §§ 77e(a)  and  (c)],  by offering  to  sell  and/or  selling

1
 Bitcoin mining is a particular type of cryptocurrency mining.  Cryptocurrency mining is a revenue-generating
process wherein a person or entity uses a computer to run special software that solves complex algorithms used to
validate transactions in a cryptocurrency network.  In the case of Bitcoin mining, the network collects all
transactions made during a set time period (usually the last ten minutes) into a list called a block.  Miners compete to
be the first to confirm the transactions in the block and write that block to the Bitcoin blockchain.  The first miner to
confirm a block of transactions and write the block to the blockchain is rewarded with newly issued or “mined”
Bitcoin.  These Bitcoins, in turn, can be held or sold on a cryptocurrency exchange for fiat currency (e.g., U.S.
dollars).

COMPLAINT  PAGE 3 OF 16
SEC
 V. TESHUATER, ET AL.
unregistered securities.
5. In  the  interest  of  protecting  the  public  from  any  further  fraudulent  activity  and
harm,  the Commission  brings  this  action  against  Defendants  seeking:  (a)  permanent injunctive
relief; (b) disgorgement of ill-gotten gains plus prejudgment interest thereon; (c) civil penalties;
and (d)   all other equitable and ancillary relief to which the Court determines the Commission is
entitled.
II.
JURISDICTION AND VENUE
6. This  case  involves  the  offer  and  sale  of  securities  in  the  forms  of  stock  and
investment contracts related to a cryptocurrency and Bitcoin-mining participation units.  The stock
and the investment contracts are securities under Section 2(a)(1) of the Securities Act [15 U.S.C.
§ 77b(a)(1)] and Section 3(a)(10) of the Exchange Act [15 U.S.C. § 78c(a)(10)].  Thus, the Court
has jurisdiction over this action under Section 20(d) and 22(a) of the Securities Act [15 U.S.C. §§
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].
7. Defendants directly and/or indirectly made use of the mails and/or of the means and
instrumentalities of interstate commerce in connection with the transactions, acts, practices, and
courses of business described in this Complaint.
8. Venue is proper because a substantial part of the events or omissions giving rise to
the  claims  occurred  within  the  Southern District  of  Texas,  Houston Division,  including  but  not
limited   to   Defendants’   sales   of   securities,   misrepresentations,   omissions, acts,   practices,
transactions, and courses of business.
III.
DEFENDANTS
9. Defendant Larry  Donnell  Leonard,  II,  age  45, is  a  natural  person  residing in

COMPLAINT  PAGE 4 OF 16
SEC
 V. TESHUATER, ET AL.
Houston, Texas.  Larry Leonard serves as the President of Teshuater and TBG, entities he created
and controlled along with his wife, Shuwana Leonard.  Larry Leonard does not hold any securities
licenses and is not and has never been registered with the Commission in any capacity.
10. Defendant Shuwana  Leonard,  age  45, is  a  natural  person  residing in Houston,
Texas.  Shuwana Leonard serves as the Director of Operations of Teshuater and TBG, entities she
created and controlled along with her husband, Larry Leonard.  Shuwana Leonard does not hold
any  securities  licenses  and is  not  and  has  never  been  registered  with  the  Commission  in  any
capacity.
11. Teshuater,  LLC  (“Teshuater”) is  a  Texas  member-managed limited  liability
company  formed  in  2017 with  its  principal  place  of  business  in  Houston,  Texas.    TBG is
Teshuater’s  sole  managing  member.    Neither Teshuater  nor  its  securities  are  or were  ever
registered with the Commission.
12. Teshua  Business  Group,  LLC  (“TBG”)  is  a  Texas  member-managed limited
liability corporation formed in 2017 with its principal place of business in  Houston, Texas.  TBG’s
members include the Leonards.  Neither TBG nor its securities are or were ever registered with
the Commission.
IV.
FACTS
A. BACKGROUND
13. Larry  Leonard  is  a  businessman  who—along  with  his  wife  Shuwana  Leonard—
created and operated several entities, including Teshuater and TBG.  A former Christian pastor,
Larry Leonard capitalized on his background as “a man of the cloth” to gain investors’ trust.  As
early as spring 2017, he, personally and on behalf of Teshuater and TBG, and Shuwana Leonard
victimized those investors through their fraudulent schemes.

COMPLAINT  PAGE 5 OF 16
SEC
 V. TESHUATER, ET AL.
14. Initially, the Leonards  focused on courting  investments  in  Teshuater,  which  they
touted  as  the  first  black-owned alkaline  water  company.    Although  Teshuater  conducted  some
operations,  the  company  earned  little-to-no  profit  since  its  inception.    Later,  Larry  Leonard
expanded  the  scheme  to  include  a  cryptocurrency  dubbed  “TeshuaCoin”  and  a  Bitcoin-mining
program.
15. Larry  Leonard  and  Teshuater  solicited  investors  primarily  through  social  media.
The Leonards appeared on Facebook Live webcasts aimed at “wealth generation” for the African-
American community.  In those Facebook Live videos, Larry Leonard and Teshuater made brazen
misrepresentations and omissions regarding, inter alia, expected investment returns and how they
would use the investors’ funds.  For example, in a November 15, 2018 Facebook Live video, Larry
Leonard  falsely  claimed  the Commission  authorized  the  Leonards  to  raise  funds  from  investors
and  to  continue their  business  operations.     In  fact,  Teshuater,  TBG,  and  the  securities  from  the
three investment offerings were never registered with the Commission, much less authorized by
the Commission.
B. D
EFENDANTS’ FRAUDULENT OFFERINGS
16. Between  March  2017  and  December  2018,  Defendants perpetrated  their  fraud
through three  separate  investment  offerings:    (1) the  offer  and  sale  of  Teshuater  “Stock
Certificates”; (2) the  offer  and  sale  of  a  cryptocurrency  dubbed TeshuaCoin;  and  (3) multiple
Bitcoin-mining investment opportunities.  Defendants raised approximately $486,984.28:
Offering Offering Dates Total Funds Raised
Teshuater Shares May 2017 – February 2019 $291,044.07
TeshuaCoins August 2017 – June 2018 $170,395.25
Bitcoin Mining December 2017 – March 2018 $25,544.96

$486,984.28

COMPLAINT  PAGE 6 OF 16
SEC
 V. TESHUATER, ET AL.
1. Teshuater Stock Certificates
17. The Leonards,  individually  and  on  behalf  of  Teshuater, sold worthless “stock
certificates”  in  Teshuater  through  a  series  of  materially false statements  and  omissions.    The
Leonards  told  investors  they  would  become  part-owners  in  Teshuater  if  they  purchased  stock.
Larry Leonard also promised that the stock would increase in value.  The Leonards knew, or were
severely reckless in not knowing, that these statements were false.
18. Teshuater is a limited liability company, not a corporation.  Therefore, it does not
have,  and cannot issue, common stock.  In other words, any stock certificates purporting to provide
ownership in Teshuater are only worth the paper on which they are printed.  However, the Leonards
never told investors that the stock certificates did not actually convey ownership in Teshuater, and,
therefore, were  worthless.    Further, Larry Leonard  arbitrarily  set  the  price  of  Teshuater’s stock
certificates, which ranged from a few cents to $1, but were typically $0.10 per share.
19. Further, Larry Leonard made  brazen  and  unsubstantiated  promises  regarding
increases  in  the  value  of  the  Teshuater  stock.    During one  Facebook  Live  presentation,  Larry
Leonard promised that a $50 investment in Teshuater “is going to be worth $750 overnight, just
like that, to [sic.] noon tomorrow.”  He later promised that a $1,000 investment would be worth
$30,000 in just a few days.
20. In  furtherance  of  the fraud,  the Leonards  prepared  and  distributed  bogus  “stock
certificates” that purported to document the number of shares purchased.  However, the Leonards
knew  that  the “stock  certificates”  were  meaningless.   Notably,  the  Leonards  never  issued
themselves  stock  certificates  to  document  their  claimed  ownership  interests  in  Teshuater.
Whenever the Leonards wanted to raise more money, they simply created new stock certificates
on their  computer,   thereby  diluting  whatever  hypothetical  ownership  interests  the  previously
issued stock certificates represented.

COMPLAINT  PAGE 7 OF 16
SEC
 V. TESHUATER, ET AL.
21. The  investors  either  sent  their  funds  directly  to  TBG  or  purchased  their  shares
through  the  Teshuater  website.    For  purchases  investors  made  on  Teshuater’s  website,  the
Leonards  caused  those  investor  funds  to  be  deposited  in  either  TBG’s  or  Teshuater’s  bank
accounts.
2. TeshuaCoins
22. Larry Leonard, individually and on behalf of Teshuater, also sought to capitalize
on    the    cryptocurrency    frenzy    by soliciting additional    investments    through    material
misrepresentations  and  omissions.   Larry Leonard  prepared  and  distributed  a  white  paper
introducing TeshuaCoins—a purported cryptocurrency issued by Teshuater (the “White Paper”).
According to the White Paper, Larry Leonard planned to raise $20 million from the TeshuaCoin
offerings.
23. The White Paper included several material misrepresentations about the usability
and  security  of  TeshuaCoins.    Among  other  things,  Larry Leonard and  Teshuater  claimed
TeshuaCoins were a “fully functioning cryptocurrency” that could be “traded and utilized in much
the same way as BitCoin.”   The White Paper also stated that TeshuaCoins’ “value and usability
are protected over time.”  Larry Leonard also told investors that TeshuaCoins were unique among
existing crypto opportunities because they were “backed” by Teshuater’s assets—bottled alkaline
water.
24. As Larry Leonard and Teshuater knew, or were severely reckless in not knowing,
these representations  were  false.    TeshuaCoins  could  not  be  used  as  currency  like  other  widely
circulated cryptocurrencies such as Bitcoin.  Investors could not even use TeshuaCoins to purchase
Teshuater  water  or  receive  a  discount  on  water  purchases,  as  Larry  Leonard  had  promised.
Furthermore, TeshuaCoins were never backed by Teshuater’s assets, and Larry Leonard never took
the necessary steps to implement the technology needed to tie those assets to TeshuaCoins.

COMPLAINT  PAGE 8 OF 16
SEC
 V. TESHUATER, ET AL.
25. Larry Leonard and Teshuater also misrepresented the value of TeshuaCoins.  Larry
Leonard regularly told investors they would become millionaires by investing in TeshuaCoins, and
that each TeshuaCoin would be worth $100 or more once the cryptocurrency started trading on an
exchange.    Although Larry Leonard  eventually paid  to  list  TeshuaCoins  on  a  cryptocurrency
exchange, TeshuaCoins never generated the trading volume,  prices, or utility needed to make Larry
Leonard’s outlandish promises come true.
26. Investors purchased their TeshuaCoins through the Teshuater website.  Following
the online purchases, the Leonards caused those investor funds to be deposited in either TBG’s or
Teshuater’s bank accounts.
3. Bitcoin-Mining Opportunity
27. Larry Leonard,   individually  and  on  behalf  of  Teshuater, continued  with  the
cryptocurrency theme and solicited additional investments in a Bitcoin-mining operation
2
 through
a series of material misrepresentations and omissions.
28. Larry Leonard  promised  investors  that they  would  receive  weekly  payouts  and
projected returns of up to 50 percent within just a few months (the time period for returns was a
moving  target  that  varied  from  3-6  months).  As  Larry  Leonard  and  Teshuater  knew,  or  were
severely reckless in not knowing, these representations were false.  Teshuater never had an actual
Bitcoin-mining operation—either with Teshuater’s own mining equipment or through a Bitcoin-
mining  partnership  with  another  entity.    And,  as  discussed  further below,  Larry  Leonard  never
used the investor funds raised for Bitcoin mining or to develop such a mining operation.
29.  In  addition,  Larry  Leonard  and  Teshuater  failed  to  disclose  to  investors  the
speculative nature of the Bitcoin-mining investment.  They never prepared or distributed a private

2
 See fn. 1, supra.

COMPLAINT  PAGE 9 OF 16
SEC
 V. TESHUATER, ET AL.
placement  memorandum  or  similar  documents.    Like  the  other fraudulent investment offerings,
investors  visited  Teshuater’s  website,  placed  the  Bitcoin-mining  investment  in  their  online
shopping carts, and purchased the investment.  Larry Leonard provided investors with false and
incomplete information on the Teshuater website regarding the projected returns, the timing for
those  returns,  and  the  dates  when  the  investment  would  begin  “trading.”    Investors  were  also
informed  that  their  returns  would  be  paid  in  Bitcoin.    Investors,  however,  never  received  any
returns.
C. D
EFENDANTS MISUSED INVESTOR FUNDS
1. The Stated Uses of Investor Funds
30. Larry Leonard,  individually  and  on  behalf  of  Teshuater,  misrepresented  how
Teshuater would use investor funds.  Among other things, he told investors the money raised from
the Teshuater stock sales would be used to improve Teshuater’s products and to take the company
public.    Similarly,  he  told  investors  that offering  proceeds  raised  from  the  Bitcoin-mining
investments would be used to mine Bitcoin.  These representations were false.
31.     Similarly, the White Paper included  a  “funding budget breakdown” describing
how Teshuater would spend the $20 million it intended to raise from the TeshuaCoin offering:
Use of Funds Amount
Crypto-Currency Mining Project (development of mining
farm)
$5,000,000
Marketing $2,000,000
Distribution Center Developments $10,000,000
             Atlanta, GA distribution center ($2,500,000)
             Seattle, WA distribution center ($2,500,000)
             Houston, TX distribution center ($2,500,000)
            Toledo, OH distribution center ($2,500,000)
Naming-Rights Deal $1,000,000
Transportation (freight expenses) $2,000,000
Total $20,000,000

COMPLAINT  PAGE 10 OF 16
SEC
 V. TESHUATER, ET AL.
32. Based  on  representations  from  Larry  Leonard  and  Teshuater,  investors  sent  their
money directly to one of several bank accounts held in the name of Teshuater or TBG, or paid for
their investments through the Teshuater website.  For online purchases, the Leonards caused those
investor funds to be deposited in either TBG’s or Teshuater’s bank accounts.
2. Defendants Used Investor Funds for Undisclosed and Unauthorized Purposes
33. Defendants did not spend investor funds from the offerings as they represented that
they would.  They misappropriated funds using jointly-owned accounts such as the bank accounts
held in the name of TBG and/or Teshuater.  By way of example, the Leonards transferred investor
funds  raised  from  the  Bitcoin-mining  investment  to  a  jointly-owned  personal  securities  account
where Larry Leonard used the funds to trade options.    After losing money from those trades, the
Leonards  used  the  remaining  Bitcoin-mining  funds  to  pay  off  Teshuater  company  loans.  They
never told investors their money was being used to fund personal securities trades or to pay off
company loans.  Further, the Leonards diverted most of the investor funds to TBG bank accounts
where  they  were  commingled  with  funds  from  other  business  operations.  They  then  used  a
majority of the commingled investor funds from the TBG bank accounts (1) to pay for business
ventures  unrelated  to  Teshuater,  TeshuaCoins,  or  Bitcoin mining; and  (2) to  pay  their  personal
living expenses, including cars and housing costs.
34. The chart below details Defendants’ misuse of investor funds:
3

3
 The total amount of funds identified in this chart exceeds the total amount of investor funds raised, because
investor funds were commingled with funds from the Leonards’ and TBG’s other business ventures.  But based on
evidence available to-date, the commingled investors’ funds were so intermingled with funds from other businesses
that it is impossible to untangle how Defendants used specific funds from particular investors.

COMPLAINT  PAGE 11 OF 16
SEC
 V. TESHUATER, ET AL.
Actual Use of Proceeds

Amount Percent
Personal Expenses of
Leonard & Family
$279,033 43.58%
General Business
Expenses
4

$103,653 16.19%
Unknown or Other Uses
of Funds
5

$82,580 12.90%
Loan Payments $73,726 11.51%
Cash Withdrawals $45,521 7.11%
Travel  $32,811 5.12%
Marketing & Consulting  $21,066 3.29%
Freight Expenses $1,604 0.25%
Trading Losses in
Personal Securities
Account
$300 0.05%
Total $640,294 100.00%

V.
CLAIMS FOR RELIEF
FIRST CLAIM FOR RELIEF
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]

Against All Defendants

35. Plaintiff Commission realleges and incorporates by reference paragraphs 1 through
34 of this Complaint as if set forth verbatim.
36. By engaging in the acts and conduct alleged herein, Teshuater, Larry Leonard, and
Shuwana Leonard, directly or indirectly, singly or in concert with others, in connection with the
purchase or sale of securities, by use of the means or instrumentalities of interstate commerce,  or

4
 “General Business Expenses” denotes payments that could be attributable to an unidentified business, but are not
accounted for in the use of proceeds explanation in the White Paper or any other representations by Defendants.
5
 The majority of this category is comprised of funds paid to third parties for unknown purposes and net transfers
made to unidentified accounts.

COMPLAINT  PAGE 12 OF 16
SEC
 V. TESHUATER, ET AL.
by  use  of  the  mails,  or  of  any  facility  of  any  national  securities  exchange,  have  (a)  employed
devices, schemes, and artifices to defraud, (b) made untrue statements of material facts, or omitted
to state material facts necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading, and/or (c) engaged in acts, practices, and courses of
business which operated as a fraud or deceit upon purchasers, prospective purchasers, and other
persons.
37. By  engaging  in  the  acts  and  conduct  alleged  herein,  TBG, directly  or  indirectly,
singly or in concert with others, in connection with the purchase or sale of securities, by use of the
means or instrumentalities of interstate commerce, or by use of the mails, or of any facility of any
national securities exchange, has (a) employed devices, schemes, and artifices to defraud, and/or
(b) engaged in acts, practices, and courses of business which operated as a fraud or deceit upon
purchasers, prospective purchasers, and other persons.
38. Defendants  engaged  in  the  above-referenced  conduct  knowingly  or  with  severe
recklessness.
39. By  engaging  in  the  conduct  described  above,  Teshuater,  Larry  Leonard,  and
Shuwana  Leonard  violated,  and  unless  restrained  and  enjoined  will  continue  to  violate,  Section
10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rules 10b-5(a), (b),  and (c) thereunder [17
C.F.R. §§ 240.10b-5(a), (b), and (c)].
40. By engaging in the conduct described above, TBG violated, and unless restrained
and enjoined will continue to violate, Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and
Rules 10b-5(a) and (c) thereunder [17 C.F.R. §§ 240.10b-5(a) and (c)].

COMPLAINT  PAGE 13 OF 16
SEC
 V. TESHUATER, ET AL.
SECOND CLAIM FOR RELIEF
Violations of Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)]

Against All Defendants

41. Plaintiff Commission realleges and incorporates by reference paragraphs 1 through
34 of this Complaint as if set forth verbatim.
42. By  engaging  in  the  acts  and  conduct  alleged  herein,  Teshuater,  Larry  Leonard,
Shuwana Leonard, and TBG directly or indirectly, singly or in concert with others, in the offer or
sale of securities, by use of the means or instrumentalities of interstate commerce or by the use of
the  mails,  knowingly  or  with  severe  recklessness,  employed  devices,  schemes,  or  artifices  to
defraud.
43. By engaging in the acts and conduct alleged herein, Teshuater, Larry Leonard, and
Shuwana  Leonard,  directly or indirectly, singly or in concert with others, in the offer or sale of
securities,  by  use  of  the  means  or  instrumentalities  of  interstate  commerce  or  by  the  use  of  the
mails, and at least negligently, made untrue statements of material facts, or omitted to state material
facts necessary in order to make the statements made, in light of the circumstances under which
they were made, not misleading.
44. By  engaging  in  the  acts  and  conduct  alleged  herein,  Teshuater,  Larry  Leonard,
Shuwana Leonard, and TBG, directly or indirectly, singly or in concert with others, in the offer or
sale of securities, by use of the means or instrumentalities of interstate commerce or by the use of
the mails, and at least negligently, engaged in transactions, practices, or courses of business which
operated as a fraud or deceit upon purchasers.
45. By engaging  in  the  conduct  described  above,  Teshuater,  Larry  Leonard,  and
Shuwana  Leonard violated,  and  unless  enjoined  will  continue  to  violate,   Sections  17(a)(1),
17(a)(2), and 17(a)(3) of the Securities Act [15 U.S.C. §§ 77q(a)(1), (2), and (3)].

COMPLAINT  PAGE 14 OF 16
SEC
 V. TESHUATER, ET AL.
46. By engaging  in  the  conduct  described  above,  TBG  violated,  and  unless  enjoined
will  continue  to  violate,   Sections  17(a)(1) and  17(a)(3)  of  the  Securities  Act  [15  U.S.C.  §§
77q(a)(1) and (3)].
THIRD CLAIM FOR RELIEF
Violations of Sections 5(a) and (c) of the Securities Act [15 U.S.C. §§ 77e(a) & (c)]

Against Teshuater, Larry Leonard, and Shuwana Leonard

47. Plaintiff Commission realleges and incorporates by reference paragraphs 1 through
34 of this Complaint as if set forth verbatim.
48. By  engaging  in  the  conduct  described  herein,  Teshuater, Larry  Leonard,  and
Shuwana Leonard, directly or indirectly, singly or in concert with others:
a. made  use  of  the  means  or  instruments  of  transportation  or  communication  in
interstate commerce or of the mails to sell, through the use or medium of written
contracts,  offering  documents,  prospectus,  oral  and  written  statements,  or
otherwise, securities as to which no registration statement was in effect; and/or
b. made  use  of  means  or  instruments  of  transportation  or  communication  in
interstate commerce or of the mails to offer to sell, through the use or medium
of   written   contracts,   offering   documents,   prospectus,   oral   and   written
statements,  or  otherwise,  securities  as  to  which  no  registration  statement  had
been filed.
49. By  engaging  in  the  conduct  described  above,  Teshuater,  Larry  Leonard,  and
Shuwana Leonard have violated, and unless enjoined will continue to violate, Sections 5(a) and
5(c) of the Securities Act [15 U.S.C. §§ 77e(a) and (c)].
VII.
REQUEST FOR RELIEF
WHEREFORE, the Commission respectfully requests that this Court:

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SEC
 V. TESHUATER, ET AL.
1. Permanently enjoin all Defendants from violating Sections 17(a)(1) and (3) of the
Securities Act [15 U.S.C. §§ 77q(a)(1) and (3)] and Section 10(b) of the Exchange Act [15 U.S.C.
§ 78j(b)] and Rules 10b-5(a) and (c) [17 C.F.R. §§ 240.10b-5(a) and (c)] thereunder.
2. Permanently enjoin Defendants Teshuater, Larry Leonard, and Shuwana Leonard
from violating Sections 5(a), 5(c), and 17(a)(2) of the Securities Act [15 U.S.C. §§ 77e(a) and (c)
and 77q(a)(2)] and Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5(b) [17
C.F.R. § 240.10b-5(b)] thereunder.
3. Permanently  enjoin  all Defendants  from  directly  or  indirectly,  including,  but  not
limited to, through any entity they own or control, participating in the issuance, purchase, offer, or
sale of any security; provided, however, that such injunction shall not prevent Larry Leonard and
Shuwana Leonard from purchasing or selling securities for their own personal accounts.
4. Order all Defendants to disgorge ill-gotten gains and benefits obtained or to which
they  were  not  otherwise  entitled,  as  a  result  of  the  violations  alleged  herein,  plus  prejudgment
interest on those amounts.
5. Order all Defendants to each pay a civil penalty 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)]
for their violations of the federal securities laws alleged herein.
6. Order such other relief as this Court may deem just, proper, and equitable.

COMPLAINT  PAGE 16 OF 16
SEC
 V. TESHUATER, ET AL.
Dated: April 2, 2020      Respectfully submitted,
 /s/ Jason P. Reinsch
JASON P. REINSCH
Attorney- in-Charge
Texas Bar No. 24040120
SDTX Bar No. 914573
JAMES E. ETRI
Texas Bar No. 24002061
SDTX Bar No. 23160

United States Securities and Exchange Commission
Fort Worth Regional Office
Burnett Plaza, Suite 1900
801 Cherry Street, Unit #18
Fort Worth, TX 76102-6882
Ph: 817-900-2601 (JPR)
Fax: 917-978-4927
[email protected]
[email protected]

ATTORNEYS FOR PLAINTIFF UNITED
STATES SECURITIES AND EXCHANGE
COMMISSION

COMPLAINT  PAGE 1 OF 16 
SEC V. TESHUATER, ET AL. 

IN THE UNITED STATES DISTRICT COURT 
FOR THE SOUTHERN DISTRICT OF TEXAS 

HOUSTON DIVISION 
________________________________________________ 
SECURITIES AND EXCHANGE COMMISSION, § 
        §    
 Plaintiff,      § 
        § 
vs.        §  
        §  Civil Action No.: 
TESHUATER, LLC, LARRY DONNELL    § 
LEONARD, II, SHUWANA LEONARD, and  § 
TESHUA BUSINESS GROUP, LLC,   § 
        §     
 Defendants.      § 
________________________________________________§ 

 
COMPLAINT 

Plaintiff Securities and Exchange Commission (“Commission”) files this Complaint 

against Defendants Teshuater, LLC (“Teshuater”), Larry Donnell Leonard, II (“Larry Leonard”), 

Shuwana Leonard (“Shuwana Leonard”), and Teshua Business Group, LLC (“TBG”) (collectively 

“Defendants”), and alleges as follows:  

I. 
SUMMARY 

1. Since at least 2017, Larry Leonard, individually and through Teshuater and TBG, 

along with his wife, Shuwana Leonard, targeted investors in the African-American community by 

promising oversized returns on various investments related to Teshuater, a business that bottled 

and distributed alkaline water.  During the course of this scheme, Defendants raised nearly 

$500,000 from over 500 investors through materially false and misleading statements and 

omissions and other deceptive conduct.   

2. Defendants perpetrated their fraud through three separate offerings.  First, Larry 

Leonard, Shuwana Leonard, and Teshuater offered and sold worthless “stock certificates” that did 

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COMPLAINT  PAGE 2 OF 16 
SEC V. TESHUATER, ET AL. 

not actually convey ownership interest in Teshuater.   Larry Leonard also promised investors, who 

purchased Teshuater stock, short-term investment returns of up to 3,000%.  Second, Larry 

Leonard, individually and on behalf of Teshuater, fraudulently sold “TeshuaCoins,” a purported 

cryptocurrency issued by Teshuater.  Among other things, he lied about the usability of 

TeshuaCoins and falsely claimed that TeshuaCoins were backed by real assets owned by Teshuater 

(i.e., the bottled water sold by the company).  Finally, Larry Leonard, individually and on behalf 

of Teshuater, peddled investments in a purported high-yield, short-term Bitcoin-mining1 program.  

The Bitcoin-mining program, however, never existed.   

3. After commingling investor funds in TBG’s and Teshuater’s bank accounts with 

funds from unrelated and undisclosed business ventures, the Leonards then used these funds to 

fund other business ventures and to pay for their personal expenses. 

4. By committing the acts alleged in this Complaint, Defendants directly and 

indirectly engaged in, and unless restrained and enjoined by the Court will continue to engage in, 

acts, transactions, practices, and courses of business that violate certain antifraud provisions of the 

federal securities laws; specifically, Section 17(a) of the Securities Act of 1933 (“Securities Act”) 

[15 U.S.C. § 77q(a)] and 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].  Larry Leonard, Shuwana 

Leonard, and Teshuater also violated the securities-registration provisions, including Sections 5(a) 

and 5(c) of the Securities Act [15 U.S.C. §§ 77e(a) and (c)], by offering to sell and/or selling 

                                                           
1 Bitcoin mining is a particular type of cryptocurrency mining.  Cryptocurrency mining is a revenue-generating 
process wherein a person or entity uses a computer to run special software that solves complex algorithms used to 
validate transactions in a cryptocurrency network.  In the case of Bitcoin mining, the network collects all 
transactions made during a set time period (usually the last ten minutes) into a list called a block.  Miners compete to 
be the first to confirm the transactions in the block and write that block to the Bitcoin blockchain.  The first miner to 
confirm a block of transactions and write the block to the blockchain is rewarded with newly issued or “mined” 
Bitcoin.  These Bitcoins, in turn, can be held or sold on a cryptocurrency exchange for fiat currency (e.g., U.S. 
dollars). 

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COMPLAINT  PAGE 3 OF 16 
SEC V. TESHUATER, ET AL. 

unregistered securities. 

5. In the interest of protecting the public from any further fraudulent activity and 

harm, the Commission brings this action against Defendants seeking: (a) permanent injunctive 

relief; (b) disgorgement of ill-gotten gains plus prejudgment interest thereon; (c) civil penalties; 

and (d) all other equitable and ancillary relief to which the Court determines the Commission is 

entitled. 

II. 
JURISDICTION AND VENUE 

6. This case involves the offer and sale of securities in the forms of stock and 

investment contracts related to a cryptocurrency and Bitcoin-mining participation units.  The stock 

and the investment contracts are securities under Section 2(a)(1) of the Securities Act [15 U.S.C. 

§ 77b(a)(1)] and Section 3(a)(10) of the Exchange Act [15 U.S.C. § 78c(a)(10)].  Thus, the Court 

has jurisdiction over this action under Section 20(d) and 22(a) of the Securities Act [15 U.S.C. §§ 

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].   

7. Defendants directly and/or indirectly made use of the mails and/or of the means and 

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

courses of business described in this Complaint. 

8. Venue is proper because a substantial part of the events or omissions giving rise to 

the claims occurred within the Southern District of Texas, Houston Division, including but not 

limited to Defendants’ sales of securities, misrepresentations, omissions, acts, practices, 

transactions, and courses of business. 

III. 
DEFENDANTS 

9. Defendant Larry Donnell Leonard, II, age 45, is a natural person residing in 

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COMPLAINT  PAGE 4 OF 16 
SEC V. TESHUATER, ET AL. 

Houston, Texas.  Larry Leonard serves as the President of Teshuater and TBG, entities he created 

and controlled along with his wife, Shuwana Leonard.  Larry Leonard does not hold any securities 

licenses and is not and has never been registered with the Commission in any capacity. 

10. Defendant Shuwana Leonard, age 45, is a natural person residing in Houston, 

Texas.  Shuwana Leonard serves as the Director of Operations of Teshuater and TBG, entities she 

created and controlled along with her husband, Larry Leonard.  Shuwana Leonard does not hold 

any securities licenses and is not and has never been registered with the Commission in any 

capacity. 

11. Teshuater, LLC (“Teshuater”) is a Texas member-managed limited liability 

company formed in 2017 with its principal place of business in Houston, Texas.  TBG is 

Teshuater’s sole managing member.  Neither Teshuater nor its securities are or were ever 

registered with the Commission. 

12. Teshua Business Group, LLC (“TBG”) is a Texas member-managed limited 

liability corporation formed in 2017 with its principal place of business in Houston, Texas.  TBG’s 

members include the Leonards.  Neither TBG nor its securities are or were ever registered with 

the Commission. 

IV. 
FACTS 

A. BACKGROUND 

13. Larry Leonard is a businessman who—along with his wife Shuwana Leonard—

created and operated several entities, including Teshuater and TBG.  A former Christian pastor, 

Larry Leonard capitalized on his background as “a man of the cloth” to gain investors’ trust.  As 

early as spring 2017, he, personally and on behalf of Teshuater and TBG, and Shuwana Leonard 

victimized those investors through their fraudulent schemes.   

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COMPLAINT  PAGE 5 OF 16 
SEC V. TESHUATER, ET AL. 

14. Initially, the Leonards focused on courting investments in Teshuater, which they 

touted as the first black-owned alkaline water company.  Although Teshuater conducted some 

operations, the company earned little-to-no profit since its inception.  Later, Larry Leonard 

expanded the scheme to include a cryptocurrency dubbed “TeshuaCoin” and a Bitcoin-mining 

program. 

15. Larry Leonard and Teshuater solicited investors primarily through social media.  

The Leonards appeared on Facebook Live webcasts aimed at “wealth generation” for the African-

American community.  In those Facebook Live videos, Larry Leonard and Teshuater made brazen 

misrepresentations and omissions regarding, inter alia, expected investment returns and how they 

would use the investors’ funds.  For example, in a November 15, 2018 Facebook Live video, Larry 

Leonard falsely claimed the Commission authorized the Leonards to raise funds from investors 

and to continue their business operations.  In fact, Teshuater, TBG, and the securities from the 

three investment offerings were never registered with the Commission, much less authorized by 

the Commission. 

B. DEFENDANTS’ FRAUDULENT OFFERINGS 

16. Between March 2017 and December 2018, Defendants perpetrated their fraud 

through three separate investment offerings:  (1) the offer and sale of Teshuater “Stock 

Certificates”; (2) the offer and sale of a cryptocurrency dubbed TeshuaCoin; and (3) multiple 

Bitcoin-mining investment opportunities.  Defendants raised approximately $486,984.28: 

Offering Offering Dates Total Funds Raised 

Teshuater Shares May 2017 – February 2019 $291,044.07 

TeshuaCoins August 2017 – June 2018 $170,395.25 

Bitcoin Mining December 2017 – March 2018 $25,544.96 

  $486,984.28 

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COMPLAINT  PAGE 6 OF 16 
SEC V. TESHUATER, ET AL. 

1. Teshuater Stock Certificates 

17. The Leonards, individually and on behalf of Teshuater, sold worthless “stock 

certificates” in Teshuater through a series of materially false statements and omissions.  The 

Leonards told investors they would become part-owners in Teshuater if they purchased stock.  

Larry Leonard also promised that the stock would increase in value.  The Leonards knew, or were 

severely reckless in not knowing, that these statements were false.   

18. Teshuater is a limited liability company, not a corporation.  Therefore, it does not 

have, and cannot issue, common stock.  In other words, any stock certificates purporting to provide 

ownership in Teshuater are only worth the paper on which they are printed.  However, the Leonards 

never told investors that the stock certificates did not actually convey ownership in Teshuater, and, 

therefore, were worthless.  Further, Larry Leonard arbitrarily set the price of Teshuater’s stock 

certificates, which ranged from a few cents to $1, but were typically $0.10 per share.   

19. Further, Larry Leonard made brazen and unsubstantiated promises regarding 

increases in the value of the Teshuater stock.  During one Facebook Live presentation, Larry 

Leonard promised that a $50 investment in Teshuater “is going to be worth $750 overnight, just 

like that, to [sic.] noon tomorrow.” He later promised that a $1,000 investment would be worth 

$30,000 in just a few days. 

20. In furtherance of the fraud, the Leonards prepared and distributed bogus “stock 

certificates” that purported to document the number of shares purchased.  However, the Leonards 

knew that the “stock certificates” were meaningless.  Notably, the Leonards never issued 

themselves stock certificates to document their claimed ownership interests in Teshuater.  

Whenever the Leonards wanted to raise more money, they simply created new stock certificates 

on their computer, thereby diluting whatever hypothetical ownership interests the previously 

issued stock certificates represented. 

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COMPLAINT  PAGE 7 OF 16 
SEC V. TESHUATER, ET AL. 

21. The investors either sent their funds directly to TBG or purchased their shares 

through the Teshuater website.  For purchases investors made on Teshuater’s website, the 

Leonards caused those investor funds to be deposited in either TBG’s or Teshuater’s bank 

accounts. 

2. TeshuaCoins 

22. Larry Leonard, individually and on behalf of Teshuater, also sought to capitalize 

on the cryptocurrency frenzy by soliciting additional investments through material 

misrepresentations and omissions.  Larry Leonard prepared and distributed a white paper 

introducing TeshuaCoins—a purported cryptocurrency issued by Teshuater (the “White Paper”).  

According to the White Paper, Larry Leonard planned to raise $20 million from the TeshuaCoin 

offerings. 

23. The White Paper included several material misrepresentations about the usability 

and security of TeshuaCoins.  Among other things, Larry Leonard and Teshuater claimed 

TeshuaCoins were a “fully functioning cryptocurrency” that could be “traded and utilized in much 

the same way as BitCoin.”  The White Paper also stated that TeshuaCoins’ “value and usability 

are protected over time.”  Larry Leonard also told investors that TeshuaCoins were unique among 

existing crypto opportunities because they were “backed” by Teshuater’s assets—bottled alkaline 

water.   

24. As Larry Leonard and Teshuater knew, or were severely reckless in not knowing, 

these representations were false.  TeshuaCoins could not be used as currency like other widely 

circulated cryptocurrencies such as Bitcoin.  Investors could not even use TeshuaCoins to purchase 

Teshuater water or receive a discount on water purchases, as Larry Leonard had promised.  

Furthermore, TeshuaCoins were never backed by Teshuater’s assets, and Larry Leonard never took 

the necessary steps to implement the technology needed to tie those assets to TeshuaCoins.     

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COMPLAINT  PAGE 8 OF 16 
SEC V. TESHUATER, ET AL. 

25. Larry Leonard and Teshuater also misrepresented the value of TeshuaCoins.  Larry 

Leonard regularly told investors they would become millionaires by investing in TeshuaCoins, and 

that each TeshuaCoin would be worth $100 or more once the cryptocurrency started trading on an 

exchange.  Although Larry Leonard eventually paid to list TeshuaCoins on a cryptocurrency 

exchange, TeshuaCoins never generated the trading volume, prices, or utility needed to make Larry 

Leonard’s outlandish promises come true.   

26. Investors purchased their TeshuaCoins through the Teshuater website.  Following 

the online purchases, the Leonards caused those investor funds to be deposited in either TBG’s or 

Teshuater’s bank accounts. 

3. Bitcoin-Mining Opportunity 

27. Larry Leonard, individually and on behalf of Teshuater, continued with the 

cryptocurrency theme and solicited additional investments in a Bitcoin-mining operation2 through 

a series of material misrepresentations and omissions.     

28. Larry Leonard promised investors that they would receive weekly payouts and 

projected returns of up to 50 percent within just a few months (the time period for returns was a 

moving target that varied from 3-6 months). As Larry Leonard and Teshuater knew, or were 

severely reckless in not knowing, these representations were false.  Teshuater never had an actual 

Bitcoin-mining operation—either with Teshuater’s own mining equipment or through a Bitcoin-

mining partnership with another entity.  And, as discussed further below, Larry Leonard never 

used the investor funds raised for Bitcoin mining or to develop such a mining operation. 

29.  In addition, Larry Leonard and Teshuater failed to disclose to investors the 

speculative nature of the Bitcoin-mining investment.  They never prepared or distributed a private 

                                                           
2 See fn. 1, supra. 

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COMPLAINT  PAGE 9 OF 16 
SEC V. TESHUATER, ET AL. 

placement memorandum or similar documents.  Like the other fraudulent investment offerings, 

investors visited Teshuater’s website, placed the Bitcoin-mining investment in their online 

shopping carts, and purchased the investment.  Larry Leonard provided investors with false and 

incomplete information on the Teshuater website regarding the projected returns, the timing for 

those returns, and the dates when the investment would begin “trading.”  Investors were also 

informed that their returns would be paid in Bitcoin.  Investors, however, never received any 

returns. 

C. DEFENDANTS MISUSED INVESTOR FUNDS 

1. The Stated Uses of Investor Funds 

30. Larry Leonard, individually and on behalf of Teshuater, misrepresented how 

Teshuater would use investor funds.  Among other things, he told investors the money raised from 

the Teshuater stock sales would be used to improve Teshuater’s products and to take the company 

public.  Similarly, he told investors that offering proceeds raised from the Bitcoin-mining 

investments would be used to mine Bitcoin.  These representations were false. 

31.     Similarly, the White Paper included a “funding budget breakdown” describing 

how Teshuater would spend the $20 million it intended to raise from the TeshuaCoin offering: 

Use of Funds Amount 
Crypto-Currency Mining Project (development of mining 
farm) 

$5,000,000 

Marketing $2,000,000 
Distribution Center Developments $10,000,000 
             Atlanta, GA distribution center ($2,500,000) 
             Seattle, WA distribution center ($2,500,000) 
             Houston, TX distribution center ($2,500,000) 
            Toledo, OH distribution center ($2,500,000) 
Naming-Rights Deal $1,000,000 
Transportation (freight expenses) $2,000,000 

Total $20,000,000 
 

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COMPLAINT  PAGE 10 OF 16 
SEC V. TESHUATER, ET AL. 

32. Based on representations from Larry Leonard and Teshuater, investors sent their 

money directly to one of several bank accounts held in the name of Teshuater or TBG, or paid for 

their investments through the Teshuater website.  For online purchases, the Leonards caused those 

investor funds to be deposited in either TBG’s or Teshuater’s bank accounts. 

2. Defendants Used Investor Funds for Undisclosed and Unauthorized Purposes 

33. Defendants did not spend investor funds from the offerings as they represented that 

they would.  They misappropriated funds using jointly-owned accounts such as the bank accounts 

held in the name of TBG and/or Teshuater.  By way of example, the Leonards transferred investor 

funds raised from the Bitcoin-mining investment to a jointly-owned personal securities account 

where Larry Leonard used the funds to trade options.  After losing money from those trades, the 

Leonards used the remaining Bitcoin-mining funds to pay off Teshuater company loans.  They 

never told investors their money was being used to fund personal securities trades or to pay off 

company loans.  Further, the Leonards diverted most of the investor funds to TBG bank accounts 

where they were commingled with funds from other business operations.  They then used a 

majority of the commingled investor funds from the TBG bank accounts (1) to pay for business 

ventures unrelated to Teshuater, TeshuaCoins, or Bitcoin mining; and (2) to pay their personal 

living expenses, including cars and housing costs. 

34. The chart below details Defendants’ misuse of investor funds:3 

                                                           
3 The total amount of funds identified in this chart exceeds the total amount of investor funds raised, because 
investor funds were commingled with funds from the Leonards’ and TBG’s other business ventures.  But based on 
evidence available to-date, the commingled investors’ funds were so intermingled with funds from other businesses 
that it is impossible to untangle how Defendants used specific funds from particular investors.  

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COMPLAINT  PAGE 11 OF 16 
SEC V. TESHUATER, ET AL. 

Actual Use of Proceeds 
 Amount Percent 
Personal Expenses of 
Leonard & Family $279,033 43.58% 

General Business 
Expenses4  $103,653 16.19% 

Unknown or Other Uses 
of Funds5  $82,580 12.90% 

Loan Payments $73,726 11.51% 
Cash Withdrawals $45,521 7.11% 
Travel  $32,811 5.12% 
Marketing & Consulting  $21,066 3.29% 
Freight Expenses $1,604 0.25% 
Trading Losses in 
Personal Securities 
Account 

$300 0.05% 

Total $640,294 100.00% 
 

V. 
CLAIMS FOR RELIEF 

FIRST CLAIM FOR RELIEF 
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] 
 

Against All Defendants  
 

35. Plaintiff Commission realleges and incorporates by reference paragraphs 1 through 

34 of this Complaint as if set forth verbatim. 

36. By engaging in the acts and conduct alleged herein, Teshuater, Larry Leonard, and 

Shuwana Leonard, directly or indirectly, singly or in concert with others, in connection with the 

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

                                                           
4 “General Business Expenses” denotes payments that could be attributable to an unidentified business, but are not 
accounted for in the use of proceeds explanation in the White Paper or any other representations by Defendants. 

5 The majority of this category is comprised of funds paid to third parties for unknown purposes and net transfers 
made to unidentified accounts. 

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COMPLAINT  PAGE 12 OF 16 
SEC V. TESHUATER, ET AL. 

by use of the mails, or of any facility of any national securities exchange, have (a) employed 

devices, schemes, and artifices to defraud, (b) made untrue statements of material facts, or omitted 

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

under which they were made, not misleading, and/or (c) engaged in acts, practices, and courses of 

business which operated as a fraud or deceit upon purchasers, prospective purchasers, and other 

persons. 

37. By engaging in the acts and conduct alleged herein, TBG, directly or indirectly, 

singly or in concert with others, in connection with the purchase or sale of securities, by use of the 

means or instrumentalities of interstate commerce, or by use of the mails, or of any facility of any 

national securities exchange, has (a) employed devices, schemes, and artifices to defraud, and/or 

(b) engaged in acts, practices, and courses of business which operated as a fraud or deceit upon 

purchasers, prospective purchasers, and other persons. 

38. Defendants engaged in the above-referenced conduct knowingly or with severe 

recklessness. 

39. By engaging in the conduct described above, Teshuater, Larry Leonard, and 

Shuwana Leonard violated, and unless restrained and enjoined will continue to violate, Section 

10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rules 10b-5(a), (b), and (c) thereunder [17 

C.F.R. §§ 240.10b-5(a), (b), and (c)]. 

40. By engaging in the conduct described above, TBG violated, and unless restrained 

and enjoined will continue to violate, Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and 

Rules 10b-5(a) and (c) thereunder [17 C.F.R. §§ 240.10b-5(a) and (c)]. 

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COMPLAINT  PAGE 13 OF 16 
SEC V. TESHUATER, ET AL. 

SECOND CLAIM FOR RELIEF   
Violations of Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)] 

 
Against All Defendants 

 
41. Plaintiff Commission realleges and incorporates by reference paragraphs 1 through 

34 of this Complaint as if set forth verbatim. 

42. By engaging in the acts and conduct alleged herein, Teshuater, Larry Leonard, 

Shuwana Leonard, and TBG directly or indirectly, singly or in concert with others, in the offer or 

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

the mails, knowingly or with severe recklessness, employed devices, schemes, or artifices to 

defraud. 

43. By engaging in the acts and conduct alleged herein, Teshuater, Larry Leonard, and 

Shuwana Leonard, directly or indirectly, singly or in concert with others, in the offer or sale of 

securities, by use of the means or instrumentalities of interstate commerce or by the use of the 

mails, and at least negligently, made untrue statements of material facts, or omitted to state material 

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

they were made, not misleading. 

44. By engaging in the acts and conduct alleged herein, Teshuater, Larry Leonard, 

Shuwana Leonard, and TBG, directly or indirectly, singly or in concert with others, in the offer or 

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

the mails, and at least negligently, engaged in transactions, practices, or courses of business which 

operated as a fraud or deceit upon purchasers. 

45. By engaging in the conduct described above, Teshuater, Larry Leonard, and 

Shuwana Leonard violated, and unless enjoined will continue to violate, Sections 17(a)(1), 

17(a)(2), and 17(a)(3) of the Securities Act [15 U.S.C. §§ 77q(a)(1), (2), and (3)]. 

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COMPLAINT  PAGE 14 OF 16 
SEC V. TESHUATER, ET AL. 

46. By engaging in the conduct described above, TBG violated, and unless enjoined 

will continue to violate, Sections 17(a)(1) and 17(a)(3) of the Securities Act [15 U.S.C. §§ 

77q(a)(1) and (3)]. 

THIRD CLAIM FOR RELIEF 
Violations of Sections 5(a) and (c) of the Securities Act [15 U.S.C. §§ 77e(a) & (c)] 

 
Against Teshuater, Larry Leonard, and Shuwana Leonard  

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

34 of this Complaint as if set forth verbatim. 

48. By engaging in the conduct described herein, Teshuater, Larry Leonard, and 

Shuwana Leonard, directly or indirectly, singly or in concert with others: 

a. made use of the means or instruments of transportation or communication in 

interstate commerce or of the mails to sell, through the use or medium of written 

contracts, offering documents, prospectus, oral and written statements, or 

otherwise, securities as to which no registration statement was in effect; and/or 

b. made use of means or instruments of transportation or communication in 

interstate commerce or of the mails to offer to sell, through the use or medium 

of written contracts, offering documents, prospectus, oral and written 

statements, or otherwise, securities as to which no registration statement had 

been filed. 

49. By engaging in the conduct described above, Teshuater, Larry Leonard, and 

Shuwana Leonard have violated, and unless enjoined will continue to violate, Sections 5(a) and 

5(c) of the Securities Act [15 U.S.C. §§ 77e(a) and (c)]. 

VII.  
REQUEST FOR RELIEF 

WHEREFORE, the Commission respectfully requests that this Court: 

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COMPLAINT  PAGE 15 OF 16 
SEC V. TESHUATER, ET AL. 

1. Permanently enjoin all Defendants from violating Sections 17(a)(1) and (3) of the 

Securities Act [15 U.S.C. §§ 77q(a)(1) and (3)] and Section 10(b) of the Exchange Act [15 U.S.C. 

§ 78j(b)] and Rules 10b-5(a) and (c) [17 C.F.R. §§ 240.10b-5(a) and (c)] thereunder. 

2. Permanently enjoin Defendants Teshuater, Larry Leonard, and Shuwana Leonard 

from violating Sections 5(a), 5(c), and 17(a)(2) of the Securities Act [15 U.S.C. §§ 77e(a) and (c) 

and 77q(a)(2)] and Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5(b) [17 

C.F.R. § 240.10b-5(b)] thereunder. 

3. Permanently enjoin all Defendants from directly or indirectly, including, but not 

limited to, through any entity they own or control, participating in the issuance, purchase, offer, or 

sale of any security; provided, however, that such injunction shall not prevent Larry Leonard and 

Shuwana Leonard from purchasing or selling securities for their own personal accounts. 

4. Order all Defendants to disgorge ill-gotten gains and benefits obtained or to which 

they were not otherwise entitled, as a result of the violations alleged herein, plus prejudgment 

interest on those amounts. 

5. Order all Defendants to each pay a civil penalty 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)] 

for their violations of the federal securities laws alleged herein. 

6. Order such other relief as this Court may deem just, proper, and equitable. 

 

Case 4:20-cv-01187   Document 1   Filed on 04/02/20 in TXSD   Page 15 of 16



 
COMPLAINT  PAGE 16 OF 16 
SEC V. TESHUATER, ET AL. 

Dated: April 2, 2020    Respectfully submitted,  

 /s/ Jason P. Reinsch     
JASON P. REINSCH 
Attorney- in-Charge 
Texas Bar No. 24040120  
SDTX Bar No. 914573 
JAMES E. ETRI  
Texas Bar No. 24002061  
SDTX Bar No. 23160 

 
United States Securities and Exchange Commission 
Fort Worth Regional Office 
Burnett Plaza, Suite 1900 
801 Cherry Street, Unit #18 
Fort Worth, TX 76102-6882 
Ph: 817-900-2601 (JPR) 
Fax: 917-978-4927 
[email protected] 
[email protected] 
 
ATTORNEYS FOR PLAINTIFF UNITED 
STATES SECURITIES AND EXCHANGE 
COMMISSION 

Case 4:20-cv-01187   Document 1   Filed on 04/02/20 in TXSD   Page 16 of 16


	I.  SUMMARY
	II.  JURISDICTION AND VENUE
	III.  DEFENDANTS
	IV.  FACTS
	A. Background
	B. Defendants’ Fraudulent Offerings
	1. Teshuater Stock Certificates
	2. TeshuaCoins
	3. Bitcoin-Mining Opportunity
	1. The Stated Uses of Investor Funds
	2. Defendants Used Investor Funds for Undisclosed and Unauthorized Purposes


	V.  CLAIMS FOR RELIEF