Securities and Exchange Commission v. Walter Ng, Kelly Ng, Bruce Horwitz, and The Mortgage Fund, LLC, Civil Action No. C-13 0895-NC (U.S. District Court for the Northern District of California)
The Securities and Exchange Commission recently charged three Bay Area real estate fund managers with fraud for secretly using the assets of a new real estate fund to rescue an older, rapidly collapsing fund.
The SEC alleges that Walter Ng, his son Kelly Ng, and Bruce Horwitz lured investors into their real estate fund called Mortgage Fund ’08 LLC (MF08) by claiming it was safe and secure and would replicate the success of their earlier real estate fund, R.E. Loans LLC. In reality, R.E. Loans could no longer make payouts to its investors, so the Ngs funneled millions of dollars from MF08 to prop up R.E. Loans. The Ngs and Horwitz falsely touted both funds’ performance in their effort to continue raising money. They raised more than $85 million during an 18-month period from investors primarily living in the San Francisco area.