07/30/2004 12:00AM

Bloodstock fraud alleged


LEXINGTON, Ky. - California's Department of Corporations has ordered a Tennessee-based Thoroughbred partnership group to stop selling unregistered securities in an alleged fraud scheme involving racing and breeding partnerships.

TC Enterprises LLC, which also did business as Triple Crown Enterprises LLC, offered both racing and broodmare partnerships to potential investors. Investors were allegedly promised returns of 25 percent to 75 percent or more on their investment through future sales of the mares and their foals.

"The principals and promoters of TC Enterprises deliberately overstated the value of the horses in which its investors were to receive investment interests," said California Corporations Commissioner William P. Wood.

In its cease and desist order, the Department of Corporations described one broodmare package, "Golden Bear Group One," in which TC Enterprises offered fractional interests in three mares. The company allegedly valued the three mares - named in the order as Elkin, Sids Beauty, and Roulette - at $520,000. When the three were last sold at auction, before TC Enterprises acquired them, Elkin brought $36,000, Sids Beauty brought $25,000, and Roulette sold for $23,000. In addition to valuing the mares at a total of $520,000, TC Enterprises also represented to investors "that the three mares in foal will sell for an estimated $300,000 each at the end of five years," according to the order.

"TC Enterprises LLC claims that it is able to achieve unusually high sales prices for its mares and foals because of the expertise of [co-founder and CEO] Tim Disney, which enables him to locate private purchasers who will pay amounts for Thoroughbreds that are greatly in excess of their auction values," the order alleges, noting that Disney allegedly misrepresented himself as a member of the Walt Disney family.

The three broodmares are currently boarded in central Kentucky, a source familiar with the situation said, but only one of them, Elkin, actually belongs to TC Enterprises.

The order said that TC Enterprises, co-founded by Disney and Ryan Landry, targeted high-income investors and claimed to have high-profile sports and media figures on its client list. The company lists a California-based sales manager named Bret Lageson and, according to the order, claims to have offices in Alcoa, Tenn., as well as in California, Bangkok, and Hong Kong. The Tennessee corporate office, the order states, is a mail box at an Alcoa branch of Mail Boxes, Etc.

According to the order, Lageson has said that 80 percent of TC Enterprises' investors were in the San Diego, Calif., area.

Tim Disney did not return a call to his office in Tennessee on Friday afternoon.