Charleston Woman Pleads Guilty to Federal Securities-Related Crime

Press Release

CHARLESTON, W.Va. - Deanna L. Drumm, 60, of Charleston, pleaded guilty today to aiding and abetting the sale and offer of unregistered securities.

According to court documents and statements made in court, in or around 2019 or 2020, Drumm became vice president of operations for Bear Industries LLC, a West Virginia company solely owned and operated by her son, Theodore Miller. Bear Industries originally served as an umbrella entity for other related businesses including a real estate company, a real estate holding company, and a construction company. As vice president of operations, Drumm was responsible for most of the day-to-day operational tasks of the Bear Industries entities, with input and direction from her son, while he lived outside the United States from in or about June 2021 to on or about August 8, 2024.

Drumm admitted that between February 2022 and August 2024, she aided and abetted the sale and offering of securities in the form of investments in two real estate-related ventures. One venture offered "direct investments" in the purported development of a dry-storage lot and residential duplexes on Bigley Avenue in Charleston. As a result of that offer, Bear Industries received $95,000 from several individuals between July and October 2022. The other venture offered investments in "Bear Lute," a pooled real estate investment vehicle launched by Drumm's son in May 2022. That offer resulted in Bear Industries obtaining more than $335,000 from more than 170 individuals between May 2022 and September 2024.

Both the direct investments and the Bear Lute investments were securities as defined by federal law, offered through interstate commerce via the internet, and were required to be registered. Drumm admitted that no registration statement was in effect for either of these securities, and that neither was exempt from the registration requirement. Drumm further admitted that she aided and abetted the offering of these unregistered securities by processing payments by investors, assisting with the creation of the investment prospectuses, and maintaining investor lists.

Drumm also admitted that she was aware of numerous false and misleading representations made in relation to both securities. Theodore Miller never possessed legal title for any of the Bigley Avenue properties that were the sites of the proposed dry-storage lot and residential duplexes. Miller defaulted on monthly payments to acquire six of the Bigley Avenue lots in the spring of 2023, losing possession of them entirely. A seventh property listed among the sites for the real estate projects, 1017 Bigley Avenue, is not a valid address. The Bear Lute investors were falsely told by Miller that Bear Industries was a large and successful real estate company, that Bear Lute generated exceptionally high and guaranteed returns, that investors would receive a minimum return of 6 percent, that the investment was secured by income-producing real estate, and that investors could request to withdraw their funds and receive them within 60 days. These representations were false.

In September 2023, the West Virginia Securities Commission issued a cease-and-desist letter to Bear Industries ordering it to stop the unregistered sale and offering of securities in Bear Lute. In November 2023, the West Virginia Securities Commission issued a cease-and-desist order regarding the same. Drumm continued to help operate Bear Lute by processing investor payments, in violation of that order, after she received both the letter and the order.

On August 9, 2024, law enforcement officers arrested Drumm's son for alleged conduct related to the direct investments and Bear Lute. Drumm admitted that she drove evidence material to her son's prosecution including, but not limited to, his laptop computer and a backpack belonging to him, from West Virginia to her parents' home in Michigan following her son's arrest to conceal it from law enforcement. Drumm was accompanied by her son's wife. Drumm hid the laptop in her parents' basement and the backpack in an upstairs closet. After entering into an agreement with the United States, Drumm arranged for the laptop and backpack to be transported back to West Virginia and voluntarily surrendered those items to the United States. The backpack was found to contain two phones and a tablet.

Drumm is scheduled to be sentenced on March 13, 2025, and faces a maximum penalty of five years in prison, up to three years of supervised release, and a $250,000 fine. Drumm also owes as much as $434,501.42 in restitution.

A federal grand jury returned a 15-count indictment on September 4, 2024, charging Miller, 34, of South Charleston, with wire fraud, money laundering, and obstruction. The indictment alleges that Miller induced the direct investments for the real estate projects and the investments in Bear Lute through material misrepresentations, false promises, and omissions of relevant information. The indictment further alleges that Miller created a social media persona of a successful real estate investor to further these schemes, when in reality he had poor credit, thin month-to-month financial margins, was delinquent on property taxes and bills, and had defaulted on loans. The indictment also alleges that Miller persuaded or attempted to persuade a witness to "alter, destroy, mutilate, and conceal" the backpack and a cell phone. An indictment is merely an allegation, and all defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

The U.S. Securities and Exchange Commission filed a parallel civil action against Miller, Bear Industries LLC, Bear Investments and Business Consulting LLC, and Drumm in U.S. District Court for the Southern District of West Virginia. The lawsuit alleges that Miller has engaged in the unregistered and fraudulent offer of securities related to his real estate-related investment programs since at least 2022, among other allegations, and seeks permanent injunctive relief, disgorgement of ill-gotten gains and prejudgment interest, and civil penalties.

United States Attorney Will Thompson made the announcement and commended the investigative work of the Federal Bureau of Investigation (FBI), the West Virginia Fusion Center, the West Virginia Securities Commission, and the U.S. Securities and Exchange Commission.

United States District Judge Irene C. Berger presided over the hearing. Assistant United States Attorney Holly Wilson is prosecuting the case.

A copy of this press release is located on the website of the U.S. Attorney's Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 2:24-cr-179.

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Updated November 21, 2024