The state regulators claim that a local Indian restaurant used deceptive tactics to persuade investors to fund its ambitious expansion plans, and then used the $380,000 for rent, operating costs, and fraudulent payments.
The Colorado Division of Securities has filed two lawsuits on April 16 to retrieve the lost money from The Bombay Group and broker Michael Bissonnette, who both declined to discuss the accusations with BusinessDen.
Bombay Clay Oven moved to Cherry Creek in 1997 after opening in Highlands Ranch in the early 1990s, and stayed at 165 Steele St. for 22 years until closing in 2019.
The owners of Bombay, Marshall and Rohini Miranda, also operated a fast-casual offshoot called Saucy Bombay at Republic Plaza downtown, but it closed in 2015 and is now under investigation by the state.
In 2014, the Mirandas allegedly hired Michael Bissonnette to pitch the idea of a large number of Saucy Bombay franchises to investors, with promises of high returns and guaranteed dividends.
The lawsuits claim that the investment in Saucy Bombay was presented as a safe and low-risk opportunity that could produce returns as high as 2,900% with assured quarterly dividends.
After the closure of the sole Saucy Bombay location at the end of 2015, Bissonnette and Marshall Miranda did not inform investors and continued presenting the restaurant as open, leading 17 people to invest $380,000 in Saucy Bombay’s parent company, The Bombay Group.
The money flowed into The Bombay Group’s bank account in 2015 and 2016 and was then used to cover expenses such as property taxes, operating costs, and rent at Bombay Clay Oven. The Bombay Group also paid itself a $34,500 commission for selling its own stock.
The division stated that no revenue was deposited into the bank account, only the investors' capital.
The lawsuits claim that any amounts paid to an investor were not actual profits but rather a repayment from their own or others' investments.
By the end of 2016, the bank account was nearly empty and no payments have been made to investors since. The Mirandas opened one Saucy Bombay location across from East High School in 2018, which remains the only one.
The lawsuits allege that none of the seventeen investors received any dividends, let alone quarterly ones, as the business was not profitable and the plan to franchise Saucy Bombay never materialized.
The Division of Securities is taking legal action against Bissonnette, his Bissonnette Consultant Group, The Bombay Group and Marshall Miranda for allegedly breaking state securities laws by deceiving investors, selling unregistered securities and, in Bissonnette’s case, selling without a license.
When contacted by phone last week, Bissonnette claimed he didn't know about the lawsuit. After receiving a copy of it from a BusinessDen reporter, he stopped answering his phone.
During a conversation with a reporter at Saucy Bombay on Thursday, Marshall Miranda stated that he, too, was oblivious to the lawsuit, even though he was aware of the Division of Securities' investigation. Miranda mentioned that he would need to consult his lawyers before discussing the matter. He did not respond to subsequent phone calls seeking comment.
“The investors in this case really believed in The Bombay Group and their restaurant Saucy Bombay,” said Tung Chan, the state’s securities commissioner. “But as we allege, the investors were not told the truth about the investments and they have not been paid back. If you have invested with The Bombay Group, please contact the Securities Division right away.”
This story was reported by our partner BusinessDen.
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