There’s still time to nominate local icons for Best of D.C.
The Securities Exchange Commission on Monday filed a fraud complaint against a digital sign company owner who once wielded influence in the Wilson Building on behalf of a separate company that ended up being sued by the D.C. Office of the Attorney General for alleged sign permit violations.
The complaint, filed in U.S. District Court for the Western District of Washington (the state), alleges that Don MacCord Jr., his company Digi Outdoor Media Inc., and Chief Financial Officer Shannon Doyle, bilked investors out of millions of dollars the company said would be used to lease space and install digital signs for commercial advertising in D.C. and surrounding areas.
The two were arrested Monday and indicted in U.S. District Court in the Northern District of California in connection with the SEC matter on charges of conspiring to defraud investors and obstruction of justice. The indictment says the scheme lasted at least from December 2013 through April 2017.
MacCord and Doyle raised $4.5 million, the complaint says, and siphoned off $2 million for personal purposes, including $1.6 million for MacCord to pay for rent and utilities for a Southern California mansion, private school tuition for his children, luxury cars and vacations; and for Doyle to use for unrelated businesses.
The two allegedly set up a fictitious vendor and presented investors with fake invoices from that vendor to purportedly charge Digi Outdoor Media for construction and improvements at properties in D.C., the complaint says. But the company had not leased any space for its signs and had no legal right to order the construction, when in fact it had not done any work at the properties. Once the invoices were paid, according to the complaint, Doyle deposited the funds in a fictitious vendor’s bank account to pay for his and MacCord’s business and personal expenses.
In February 2015, Digi Outdoor Media filed a registration statement with the SEC to sell public shares of the company. The statement painted a misleading picture about the firm’s revenue-generating capacity, its financial condition, and its prospects for success, according to the complaint. In preparing the statement, MacCord and Doyle provided false information to the firm hired to audit the company’s false financial statements, the complaint states, then fired the auditor when it tried to confirm facts underlying the financial statements. According to the complaint, MacCord and Doyle continued to solicit investors into 2016 and are currently soliciting investment for a new venture. In its complaint, the SEC is asking the court to prohibit defendants from further alleged violations of federal securities laws.
As Loose Lips has reported, MacCord is a major player in the outdoor advertising industry, according to his biography on the Initiative for Global Development website. With 20-plus years of experience, he has an extensive network of local and national political contacts, has developed outdoor signage in New York, California, Arizona, and London, and has invested in emerging markets such as Tanzania and Chile, his bio states.
While MacCord was running Digi Outdoor Media, a Nevada firm, he also served as a representative of the firm on the board of an investment group called Digi Media Communications, a Delaware limited liability company that was installing a network of 60 digital signs with a projected value of $800 million over the next five or so years. That is, until Digi installed signs on commercial buildings in downtown D.C. in 2016 without the proper permits and was slapped with stop-work orders from the D.C. Office of Consumer and Regulatory Affairs. The company ignored those orders until D.C. Attorney General Karl Racine obtained a preliminary injunction last November.
The plot thickened in December when Ward 2 Councilmember Jack Evans introduced emergency legislation to allow the signs to remain and for dozens more to be installed.
LL exposed Evans’ ties to MacCord, with whom he bundled $52,300 in campaign contributions from business interests that included developers with ties to Mayor Muriel Bowser for a Hillary Clinton fundraiser on Nantucket, last December. LL also reported on the subpoenas in the SEC action, and MacCord’s history of debt collection, bad checks, state tax liens, foreclosures and breached contracts and leases, according to court records from California, Maryland, Nevada, and Washington state.
Evans pulled his bill for lack of votes. MacCord turned to lawyer-lobbyist David “The King” Wilmot to work the halls of the Wilson Building, and Bowser and Evans toyed with the idea of an executive order to lift the stop-work orders, but did not execute.
On Monday, Superior Court Judge Florence Pan made an oral ruling in the company’s favor when she granted a partial summary judgment motion to modify the preliminary injunction. Under Pan’s ruling, the company will be able to build and turn on 10 digital signs at the old Woodworth & Lothrop building, though the matter comes back to court for reconsideration in January.
In a second ruling, Pan dismissed the company’s constitutional and due process claims of damages in the amount of roughly $450 million. Racine’s office had no comment Monday night. MacCord did not return calls to his cellphone, and Doyle could not be reached.
*This post has been updated to state that MacCord and Doyle were arrested on Monday, and also to clarify MacCord’s relationship with Digi Outdoor Media and Digi Media Communications, which says that MacCord resigned from its board in March. Digi Media Communications also says that it is not under investigation in the Digi Outdoor Media matter, and that neither Doyle nor MacCord are directors or employees of Digi Media Communications. Jack Evans represents Ward 2.