Associated Press
GREAT FALLS, Mont. — The president of a bankrupt Great Falls company that owned and operated restaurants in three states is charged with securities fraud for soliciting $4.5 million from 15 investors without telling them the business was struggling and without registering the investments with state regulators.
The state auditor’s office charged Kenneth Hatzenbeller with three counts of fraudulent securities practices and with failing to register a security and as a securities broker.
Charging documents say Hatzenbeller failed to repay $3.3 million to those investors. He has pleaded not guilty to the felony charges and his trial is set for Nov. 14.
Two of the charges allege Hatzenbeller took money from “vulnerable persons” over the age of 60 — $625,000 from a couple and $500,000 from a man who was older than 70. The couple was owed $398,000, which they considered their life savings. The man was owed $480,000 — a substantial part of his retirement income, charging documents said.
The promissory notes for investments sold between October 2013 and September 2015 also initially were signed by two Great Falls physicians, the Great Falls Tribune reports . No criminal charges have been filed against the doctors, who were co-owners with Hatzenbeller. Both filed for personal bankruptcy earlier this year, as did Hatzenbeller.
The company, Shoot the Moon LLC, operated 11 Chili’s restaurants in Montana, Idaho and eastern Washington. It filed for Chapter 11 bankruptcy reorganization in October 2015, listing $22.7 million in assets and $24.8 million in debt.
Ken Olson, Hatzenbeller’s attorney in the securities case, declined to comment Wednesday, saying he was still studying the case.
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