Elk Grove-based InfrAegis charged in $20 million fraud

An Elk Grove Village company and its Arlington Heights CEO have been charged with defrauding investors in a $20 million stock offering scheme, which claimed the company had a deal in place to provide Chicago with Homeland Security equipment.

The U.S. Securities and Exchange Commission filed the charges against InfrAegis, Inc., and 64-year-old CEO Gregory E. Webb on Tuesday.

Webb told investors that InfrAegis had a contract with the city of Chicago that would wield profits well over $80 million to install a kiosk that could detect nuclear or biological weapons throughout the city, according to the SEC.

The SEC claims Webb conducted a fraudulent, unregistered stock offering of InfrAegis stock that raised at least $20 million from at least 395 investors in 29 states.

The federal complaint claims Webb offered materials to investors that preyed on their emotions by referencing major terrorist attacks, including the Sept. 11 attacks. The SEC cites the company's logo, which is a red square with the letters “Ia” in the center and the numbers “911.2011” printed below. Some materials also claimed InfrAegis' products could have prevented major terrorist attacks in London and Mumbai, according to the complaint.

InfrAegis never sold a single product, according to the SEC.

The company also claimed to have sold a partial stake of InfrAegis for $8.7 billion in cash, and told investors the transaction would result in a 3800 to 4000 percent return, according to the complaint.

Webb directed InfrAegis to pay him at least $741,000 using investor funds over the course of the stock offering. From April 2005 through June 2010, Webb used a corporate credit card funded by investors to purchase at least $70,000 in goods and services for himself including vacations, clothing, fast food, groceries, tobacco, liquor, movies video games and music, according to court filings.