SEC Accuses Oklahoma Businessman of Investor Fraud: A Detailed Breakdown
The Securities and Exchange Commission (SEC) has leveled serious allegations against Oklahoma businessman Anthem Hayek Blanchard, accusing him of orchestrating a scheme to defraud investors out of millions of dollars. The SEC’s complaint, filed on September 23, 2024, in the U.S. District Court for the District of Kansas, paints a picture of deliberate deception and inflated promises designed to lure unsuspecting individuals into investing in Blanchard’s software company, Anthem Holdings.
The heart of the SEC’s case lies in the claim that Blanchard and Anthem Holdings presented a distorted reality to potential investors. The complaint alleges that Blanchard fabricated details regarding the company’s operations, including the existence of multi-million dollar government contracts, unrealistic revenue projections, and exaggerated business development deals. According to the SEC, these weren’t complex accounting maneuvers or sophisticated financial engineering; instead, the agency characterizes the alleged fraud as a straightforward case of lying to investors and engaging in flawed, manipulated financial calculations.
The SEC specifically points to Blanchard’s marketing of Anthem Holdings, which owned Hera Software Development, Inc. (Hera), as a key element of the alleged deception. In 2020, Blanchard purportedly sought investment in Anthem Holdings, touting Hera as a software development firm specializing in blockchain technologies for cybersecurity and supply chain management.
During the company’s initial stock offering in 2020, the SEC claims Blanchard projected revenues exceeding $400 million over a five-year period. This projection, according to the SEC, was wildly optimistic, especially considering that Hera had only secured a single $250,000 contract with a company in the Netherlands. Blanchard allegedly presented to investors that Hera would have over 300 employees and a year-on-year growth rate as high as 1500% by 2024. The SEC reports that approximately 200 individuals invested in the initial stock offering based on these projections.
The SEC’s complaint goes on to detail specific instances of alleged fabrication. Blanchard is accused of basing his revenue projections on unrealistic and unfounded assumptions. The projections allegedly assumed that Hera would secure contracts worth millions in 2020. However, the SEC claims that most of these contracts were not real, and there was no legitimate basis for believing they were close to being finalized. The SEC asserts that these inflated projections misled investors into believing that Anthem Holdings was experiencing rapid growth.
The complaint highlights that Blanchard allegedly told investors his company would secure multiple million-dollar contracts with two unnamed government agencies by the end of 2020. The SEC alleges that neither Blanchard nor Anthem Holdings had any contact with these agencies, implying that he fabricated their existence entirely.
Further, the SEC claims that although Blanchard hired a contractor to pursue these government deals, the contractor made no progress and ceased working on the matter in March 2020. Despite this, the complaint states that Blanchard continued to present the government contracts as imminent deals to prospective investors months later.
The SEC alleges that in 2022, Blanchard included multiple government entities and companies as clients or in advanced contract negotiations in his documents to investors. The SEC’s complaint states that none of these entities were Blanchard’s clients nor were they negotiating contracts with him. The SEC asserts that there was no basis for Blanchard to believe that Anthem Holdings would obtain contracts with these entities.
Beyond fabricated contracts, the SEC alleges that a $1 million investment by an unnamed group was also fabricated in an attempt to bolster confidence in the company and encourage further fundraising.
The SEC further contends that Blanchard artificially inflated revenue projections using flawed financial modeling. According to the complaint, Blanchard incorrectly combined quarterly earnings from different years instead of from a single year. This alleged accounting manipulation, according to the SEC, significantly exaggerated Anthem Holdings’ projected yearly revenue. The SEC also claims that Blanchard misallocated revenue by shifting projected profits to the wrong years.
The SEC asserts that these errors and the fictitious contracts contributed to a vastly inflated five-year revenue projection of over $400 million. The SEC argues that these errors were not simple oversights but deliberate misrepresentations. According to the SEC, if Blanchard had summed the correct quarters and allocated projected revenues correctly, the projections would have forecasted approximately $60 million of revenues in 2024 and aggregate five-year revenues of under $100 million.
As a result of these alleged actions, the SEC seeks to permanently bar Blanchard from serving as an officer or director of any public company, prohibit him and his companies from participating in securities offerings, and impose civil monetary penalties up to $250,000.
Despite the gravity of the accusations, Blanchard has publicly denied any wrongdoing. In response to the SEC’s allegations, Blanchard has reportedly described the situation as a "mini, mini, mini Trump situation," suggesting that he is a victim of politically motivated legal action. He claims he is innocent and attributes the SEC’s allegations to a person he calls a "stalker" who hates him.
Blanchard claims the Center for Individual Rights, a nonprofit civil rights group, now represents him; however, the organization does not list his case as an active one.
Court records indicate that Blanchard’s company was insolvent before the SEC filing. His partners reportedly swapped hundreds of thousands in unpaid debt for equity in Copper Tree Inc., a company owned by Blanchard’s wife, Cythina Blanchard, that controls the Price Tower in Bartlesville, OK. Cynthia Blanchard, who was listed on the company’s website as co-founder and president of her husband’s company, is not a defendant in the SEC suit.
Notably, Copper Tree Inc. entered Chapter 7 liquidation bankruptcy in January, the day after a court ordered the immediate sale of the Price Tower to a prospective buyer. The bankruptcy filing put a stay on the court’s order.
The case, Securities and Exchange Commission v. Anthem Hayek Blanchard and Anthem Holdings Company, No. 2:24-cv-02437, is currently pending in the U.S. District Court for the District of Kansas. A trial date has not yet been set.
The outcome of this case could have significant consequences for Blanchard, his company, and the investors who allegedly lost their investments. The SEC’s pursuit of this case underscores its commitment to protecting investors from fraudulent schemes and ensuring the integrity of the securities markets. The legal proceedings will determine whether the SEC can successfully prove its allegations against Blanchard and hold him accountable for the alleged misconduct. The case highlights the risks associated with investing and the importance of conducting thorough due diligence before making investment decisions.
