A Salt Lake City private-equity company and its chief executive are under state orders to prove they haven't defrauded two investors, even as another of the CEO's companies is seeking to raise $100 million from other investors to buy up distressed banks loans issued by the FDIC.

SilverLeaf Capital Partners 1 and Dwight Shane Baldwin allegedly misled one investor into believing that if she put up $100,000 she would get her money back within five months, plus a $300,000 profit and other perks.

Her money was to be invested in GarageCo Inc., a California toy manufacturer. Instead it paid for a party in Park City and covered SilverLeaf's American Express bill, payroll, commissions and health insurance premiums. At lease $17,000 was unaccounted for, according to a complaint lodged by the Utah Division of Securities. The investor, Nicole Lindley, has been unable to recover her money.

SilverLeak persuaded another investor, Matthew Lee, to part with $100,000 in return for a hefty profit from GarageCo, a half-seat on the company's board of directors and other rights, according to the complaint. It is further alleged the money was deposited into SilverLeaf's bank account, where it was mixed in with other money and disappeared.

Lee reportedly asked for his money back, but was put off. Baldwin told Lee he would let him know if a refund was possible, and if so, when, according to the complaint. So far, the money hasn't been returned.

Baldwin, 28, calls the allegations "misunderstandings." He said a disgruntled executive he fired touched them off. Out of spite, the employee urged Lindley and Lee to make false claims against him and the company, Baldwin said last week.

Baldwin contests other allegations against him, including charges he has represented himself as a licensed investment agent and failed to deliver $150 million to a company planning to construct a nuclear power in Idaho in return for a fee. And although the securities division has questions about his efforts to raise $100 million for the distress loans, Baldwin contends he is doing nothing wrong.

"I won't say that I am perfect. Have I made mistakes? Absolutely. In the past two years I've learned more than in the last five, a lot of things I don't want to learn again," Baldwin said.

A document issued in December spells out complaints Lindley and Lee lodged against Baldwin and SilverLeaf. It orders Baldwin and the company to show why each shouldn't be ordered to pay large fines and why Baldwin should not be barred from the securities industry for life for acting acting as a securities broker without a license.

"What we have alleged is that [Baldwin] committed securities fraud in the way he marketed GarageCo stock and by making false statements and omitting material facts in the information he gave the investors," said Keith Woodwell, securities division director.

Baldwin and SilverLeaf have denied wrongdoing. They say Lindley and Lee asked Baldwin and the company about investing in GarageCo and that SilverLeaf and he were not even aware of the toy company until they were approached.

The case is pending. An administrative hearing set for last February was continued indefinitely.

"There's been no substantive hearing. I do (know why), but I honestly can't tell you at this point. We are looking at going in a different direction in this case," Woodwell said.

Baldwin is a risk-taker. While he allegedly was masquerading as a licensed securities broker to Lindley and Lee, Baldwin was attempting to persuade the securities division to approve his company's application for an investment adviser license. If granted, SilverLeaf Capital Partners would have been the license holder. But as the company's CEO, Baldwin would have been authorized to sell securities, too.

The application was denied, meaning any past or future investment solicitations Baldwin or SilverLeaf engaged in would violate Utah securities laws. In rejecting the application last August, the securities division said SilverLeaf's license request contained information that was "false and misleading." Moreover, Baldwin represented himself and the company as licensed before and during the application process, the division said.

"Baldwin entered contracts with unsuspecting clients based on such misrepresentations, accepted compensation, and assumed obligations requiring licenses that neither he nor [SilverLeaf] possessed," the complaint alleges.

Baldwin was given 30 days to appeal the decision, handed down in August 2008. He didn't. Last week, he insisted he sold equity investments, not securities, to Lindley and Lee.

Baldwin was working on another front while the securities division was considering his license application. In December 2007, Alternate Energy Holdings Inc., a company trying to build a nuclear power plant in Elmore County, Idaho, announced it had received a $150 million financing commitment from SilverLeaf Capital Partners.

AEHI never received the money, and a $25,000 deposit it gave Baldwin to secure the deal was never returned, said Don Gillispie, AEHI's CEO.

"It's been well over a year since the refund was due. Repeated letters and calls were to no avail. He would promise, but never deliver. Further, I later learned he was not even a licensed broker," Gillispie said.

Baldwin said last week he hasn't spoken to AEHI in two years.

"Have them call me. I'll write them a check today. I didn't even realize they were looking for the money," he said.

Lately, Baldwin has branched into a different field. In January, a similarly named company he created, SilverLeaf Financial, began buying distressed loans from the Federal Deposit Insurance Corp. and other financial institutions.

The FDIC has shut 57 banks this year amid rising unemployment and property foreclosures resulting from the recession. Other banks usually buy the deposits. Loans are packaged by the FDIC, which often sells them at auction in "pools" to bidders such as SilverLeaf Financial. Buyers then attempt to work out repayment plans with borrowers, hoping to reap a profit.

In January, SilverLeaf Financial bid successfully on one loan, paying 55 cents on the dollar for a commercial mortgage with a face value of $5.4 million. By mid-April, it had bid successfully on four pools containing nine loans, according to the FDIC. The company paid a total of $17.5 million to acquire nonperforming commercial loans valued at $32.5 million.

SilverLeaf Financial says the FDIC has awarded 11 pools containing 17 loans to SilverLeaf Financial. FDIC officials did not respond to questions about the company.

Earlier this month, the company said it had acquired another $28 million package of nonperforming loans for $4.9 million. The assets are 321 single-family mortgages originated by GMAC Corp., the financing arm of General Motors. SilverLeaf Financial said it also picked up a $5 million loan secured by a storage facility in Fort Myers, Fla.In May, SilverLeaf Financial issued a press release saying it was seeking $100 million to buy more distressed assets from the FDIC. The company said it was looking for "accredited" investors and institutional investors to take part.

Earlier this month, SilverLeaf Financial declared in a second press release it was "selectively offering participation opportunities to accredited investors" who would join with the company to "capitalize on the window of opportunity that has arisen from the current recession within the economic arena."

Accredited investors are those with more than $1 million in assets or annual income exceeding more than $200,000 a year. Because of their wealth, regulators consider them capable of understanding the hazards of putting money into unregistered securities, hedge funds and other risky investments.

Woodwell, the securities division chief, said SilverLeaf Financial's press releases appear to be solicitations to invest in securities. Any effort to solicit investors to buy a security must first be cleared with the division and the Securities and Exchange Commission so that there is a clearinghouse for investors to find relevant information before parting with their money. The rule applies to pitches made to accredited and ordinary investors alike.

Baldwin and SilverLeaf Financial haven't done that, Woodwell said.

"I'm not willing to prejudge it because we don't have all the facts. We haven't talked to them yet. But we intend to," he said.

An attempt to contact the SEC for comment went unanswered.

Baldwin said his securities lawyer has assured him the solicitations are legal because the company is not marketing securities.

"We do this in the form of a participation agreement. It's considered exempt for being registered at any level inside the securities division and the SEC," he said.

Baldwin said he would welcome any scrutiny by regulators.

"If they aren't comfortable, then they need to sit down with me and show me how to do it," he said.