Two Indian restaurants have been accused of duping their investors of $380,000 by state regulators, who seek to retrieve the funds from the alleged business outlets.
The Colorado Division of Securities has filed a lawsuit alleging that the owners of Indian restaurants Bombay Clay Oven and Saucy Bombay used "half-truths and lies" to sell investors on their grandiose plans for a nationwide expansion before spending the USD 380,000 shareholders invested on rent, operating costs, and Ponzi-like payments, as per media reports.
The Bombay Group (TBG) owned the two restaurants and signed a deal with financial broker Michael Bissonnette.
According to local media reports, both defendants ignored opportunities to clarify their stand and shied away from engaging with the media.
TBG, like many in the restaurant sector, had great intentions to launch a nationwide chain of eateries and grow into a national conglomerate.
In 2014, TBG owned and managed two restaurants: Bombay Clay Oven, which had been open for almost two decades, and Saucy Bombay, a new venture with a single outlet in a food court.
TBG planned to franchise Saucy Bombay to profit from the fast-casual restaurant trend, according to the complaint.
"The investors in this case believed in The Bombay Group and their restaurant, Saucy Bombay," informed Tung Chan, the state's securities commissioner.
"However, as we allege, the investors were not told the truth about the transactions and have not been paid back. Additionally, the security regulator commissioner warned all the investors that "if you have invested with The Bombay Group, please contact the Securities Division right away," he added.
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