Former Sterlington, Louisiana, mayor agrees to pay $35,000 fine
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Former Sterlington, Louisiana, Mayor Vern Breland has, without admitting or denying the findings, agreed to pay a $35,000 civil penalty in addition to a permanent bar from future municipal securities offerings following his role in providing false projections to the Louisiana State Bond Commission in connection with two offerings worth $5.8 million, the Securities and Exchange Commission said.
Breland charges against Breland, Fletcher and his firm Twin Spires in June 2022 for submitting false financial projections, overstating the number of historical and projected sewer customers in order to mislead the Louisiana State Bond Commission as to the town’s ability to cover the debt service, the SEC said.
Investors in the bonds were not informed that Sterlington obtained SBC approval of the bonds based on false projections and did not disclose to investors that the town, at Breland’s direction, misused over $3 million from earlier bond offerings.
Breland, who represented himself in court, fought the charges, laying out the argument that he relied on Twin Spires for professional advice, questioned the role of the SBC, the lack of damages to the investors in the bonds, and his own lack of experience with bond issuances and securities law.
Breland pointed out that the estimates in question, which the Commission argued substantially overstated the number of historical and projected sewer customers in order to mislead the Louisiana State Bond Commission, were prepared by his co-defendants and even though the proceeds weren’t spent on sewer upgrades as promised, they still financed city operations, he argued.
The bonds were sold via private placement and Breland defended the accuracy of the disputed estimates, calling them reasonable estimations “of the future income of the city of Sterlington including its actual operation.”
Breland retired from his post as mayor in 2018 but his issues with the law continue. He was indicted by the State of Louisiana with a charge of malfeasance in office for his role in adding $20 million in debt during his tenure as mayor and for having allegedly spent some $3 million on unlawful expenditures, in addition to flouting public law on major public works.
He was booked at the Ouachita Correctional Center in August 2020 and released on $25,000 bond. The case remains ongoing.
