Arkansas Files Cease & Desist Against Texas Wind Turbine Maker

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The Arkansas Securities Commissioner filed a cease and desist order on Thursday against a Texas-based company that makes wind farm turbines.

The Commission said that Dragonfly Industries of Frisco, Texas, and its CEO Jody Davis committed securities fraud.

The Commission alleges Dragonfly sold three investment contracts that were not registered; that Davis failed to tell investors he was convicted in Oklahoma of wire fraud and money laundering in 2009; and that Davis told investors a $10 million federal grant was imminent when the U.S. Department of Energy had previously said the project was unlikely to receive the grant.

In 2009, Davis pleaded guilty to 18 counts of wire fraud and 64 counts of money laundering in Oklahoma. He served 17 months in federal prison followed by probation from July 2011 to July 2014, according to a transfer of jurisdiction moving Davis’ case from Oklahoma to the Eastern District of Arkansas.

Court records reveal Davis diverted nearly $1.2 million in payments from his employers between August 2003 to February 2005 into a bank account that he used to purchase vehicles, real estate and other personal goods.

Davis’ criminal history also includes a 1999 hot check charge and possession of a controlled substance.

Dragonfly Industries International, LLC filed its certificate of formation in September 2014 with the Texas Secretary of State’s office. Jody Davis is listed as a governing member of the company on a Texas Franchise Tax Public Information Report filed in 2015.

In 2014, Dragonfly representatives spoke to Arkansas’ Elm Springs Planning Commission and City Council about their proposal to build an 80-megawatt, multi-million dollar wind farm on 300 acres west of Springdale. Davis and other company representatives assured town officials their unique wind turbine design was quieter, safer for wildlife and more efficient than the standard three-bladed design.

Davis’ attorney, Cole Fegan, denies the allegations. Fegan indicated that Dragonfly never misled investors and will ask for a formal hearing to clear up the allegations.

 

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