Washington:
Two Indian restaurants in Colorado duped investors out of $380,000, state regulators allege, and are now trying to recover the amount from them.
In a lawsuit, the Colorado Division of Securities has alleged that the owners of Indian restaurants Bombay Clay Oven and Saucy Bombay used “half-truths and lies” to convince investors of their grand plans for a nationwide expansion before spending the $380,000 the shareholders had invested. about rent, operating costs and Ponzi-like payments, local newspaper BusinessDen reported on Wednesday.
The two restaurants were owned by The Bombay Group (TBG), which entered into an agreement with stockbroker Michael Bissonnette. Both defendants declined offers to discuss the allegations with “BusinessDen,” the newspaper reported.
Like many in the restaurant industry, TBG had big plans to expand its operations into a nationwide conglomerate, with hundreds or even thousands of locations. In 2014, TBG owned and operated two restaurants: Bombay Clay Oven, a restaurant that had been in business for more than twenty years, and Saucy Bombay, a new initiative with one location in a food court.
TBG's plan was to franchise Saucy Bombay to capitalize on the fast-casual restaurant trend, the lawsuit said.
“The investors in this case really believed in The Bombay Group and their restaurant, Saucy Bombay,” Tung Chan, the state securities commissioner, told the newspaper. “But as we allege, the investors have not told the truth about the investments and have not been repaid. If you have invested with The Bombay Group, please contact the Securities Division immediately,” he said.
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