Litigation Releases (Brian Kuzdas and John Rowland)

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 26593 / July 24, 2026

Securities and Exchange Commission v. Brian Kuzdas and John Rowland,No. 5:26-cv-07616 (N.D. Cal. filed July 23, 2026)

SEC Files Settled Action Against Founders of Modular Construction Startup Alleging $65 Million Offering Fraud

On July 23, 2026, the Securities and Exchange Commission filed settled charges against Brian Kuzdas and John Rowland for allegedly operating an offering fraud through S2A Modular Corp., a modular construction business they co-founded, and related entities. The Commission alleges that Defendants misused significant portions of investor funds and misled investors about customer demand and the prospects for institutional investment in their business.

The SEC's complaint, filed in the United States District Court for the Northern District of California, alleges that from approximately April 2018 through January 2025, Defendants raised approximately $65 million from nearly 350 retail investors nationwide to finance the construction and operation of "MegaFactories" across the United States. According to the complaint, the MegaFactories, once operational, would manufacture modular units of a commercial building or residential home in a controlled, indoor environment, and then ship the units on site for full assembly. As alleged, Defendants told investors that their funds would be used only for the specific MegaFactory investors chose to fund and that investors would receive returns from their chosen MegaFactory. However, the complaint alleges that Defendants, without telling investors, diverted a substantial portion of investor funds away from the investors' selected MegaFactory to another MegaFactory in Patterson, California. The complaint also alleges that from 2020 through 2023, Defendants falsely told investors that they had over 600 units under contract, when in fact Defendants obtained only around 100 customer contracts by the end of 2024. Furthermore, the complaint alleges that from 2022 through early 2025, Defendants repeatedly claimed that institutional investment was imminent despite knowing it was not.

Without admitting the allegations in the SEC's complaint, Defendants have consented to the entry of final judgments, subject to court approval, which would permanently enjoin them from violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b 5 thereunder, order each to pay a $200,000 civil penalty, and impose on each two-year officer and director bars.

The Commission's investigation was conducted by Jeff Goldberg and Mark Dee under the supervision of Sean M. O'Neill, Fernando Torres, and Stephanie N. Moot of the SEC's Miami Regional Office. The SEC's litigation is being led by Michael Mikulic under the supervision of Russell Koonin.