Articles Posted in Real Estate Investment Fraud

South Florida Real Estate Fraud Litigation and Arbitration Attorney.

Securities and Exchange Commission v. Carl Keith Battie, No. 3:17-CV-01113-K (N.D. Tex filed Apr. 28, 2017)

United States v. Carl Keith Battie, No. 3:16-CR-00051-D (N.D. Tex. filed October 24, 2016)

Boca Raton, Florida Real Estate Investment and Offering Fraud FINRA Arbitration and Litigation Attorney:

SEC Charges Business Owner and Stockbroker in Maryland-Based Real Estate Offering Fraud

The Securities and Exchange Commission today charged the owner of a Maryland-based real estate company with conducting an offering fraud and spending investor money on such personal expenses as his mortgage, country club dues, and season tickets to the Baltimore Ravens. The agency also charged a former stockbroker for participating in the scheme.

South Florida Real Estate Fraud, Misrepresentation and Mismanagement Litigation and Arbitration Attorney:

SEC Charges Former Stock Promoter With Defrauding Investors in Florida Real Estate Venture

The Securities and Exchange Commission recently filed fraud charges against a former Florida-based stock promoter currently serving a two-year prison sentence for lying to SEC investigators.

Private Equity, Private Placement and Private Investment – South Florida Fraud, Misrepresentation and Mismanagement State and Federal Litigation and FINRA Arbitration Attorney:

The Securities and Exchange Commission recently charged the former president of a purported private equity real estate firm based in San Bernardino, Calif., with defrauding nearly 500 investors who purchased promissory notes under the false premise that they were secured by specific properties or other collateral.

The SEC alleges that Larry Polhill used his company American Pacific Financial Corporation (APFC) to buy and sell real estate and distressed assets, and he offered investors the opportunity to invest in the company through unregistered notes that would yield them interest payments of 5 to 17 percent per year. However, the collateral that Polhill and APFC claimed made the investments secure was often non-existent or otherwise impaired. The properties underlying the investments were sometimes even sold without notice to investors. When APFC eventually filed for bankruptcy, it named the investors as unsecured creditors who were owed nearly $160 million. None of Polhill’s investment offerings were registered with the SEC.

Limited Partnership Breach of Contract, Breach of Fiduciary Duty, Mismanagement and Misrepresentation Commercial and Business State and Federal Court Litigation Attorney:

A Limited Partnership is an organization made up of a General Partner, who manages the entity, and limited partners, who invest money but have limited liability, are who are not involved in the day-to-day management and operation of the venture.  With certain exceptions, limited partners usually cannot lose more than their invested capital.  Limited partnerships are engaged in business ventures such as real estate, oil and gas and equipment leasing.

Public limited partnerships are sold through brokerage firms by the use of written offering documents.  Private limited partnerships can be offered through various means. Regardless, each offering method must comply with federal and state securities laws.  

Securities and Exchange Commission v. USA Real Estate Fund 1, Inc. and Daniel F. Peterson, Civil Action No. CV-13-157-LRS (E.D. Washington, filed Apr. 24, 2013)

SEC Seeks to Halt Scheme Raising Investor Funds Under Guise of Jobs Act

The Securities and Exchange Commission recently announced fraud charges against a Spokane Valley, Wash., company and its owner for misleading investors with claims to raise billions of investment capital under the Jumpstart Our Business Startups (JOBS) Act and invest it exclusively in American businesses.

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.

SEC Charges Real Estate Executives in Florida-Based $300 Million Investment Scheme

The Securities and Exchange Commission recently charged five former real estate executives who defrauded investors into believing they were funding the development of five-star destination resorts in Florida and Las Vegas when they were actually buying into a Ponzi scheme.

The SEC alleges that Cay Clubs Resorts and Marinas raised more than $300 million from nearly 1,400 investors nationwide through a network of hundreds of sales agents, marketing seminars, and podcasts that touted the profitability of purchasing units at Cay Clubs resort locations. Investors were promised immediate income from a guaranteed 15 percent return and a future income stream through a rental program that Cay Clubs managed. But instead of using investor funds to develop resort properties and units, the Cay Clubs executives used new investor deposits to pay leaseback returns to earlier investors. Meanwhile they paid themselves exorbitant salaries and commissions totaling more than $30 million, and investor funds also were misused to buy airplanes and boats. While still advertising itself as a profitable venture, Cay Clubs eventually abandoned its operations. Many investors’ properties went into foreclosure.

Securities and Exchange Commission v. James C. Mulholland, Jr. and Thomas S. Mulholland, Civil Action No. 12-cv-14663 (E.D. Mich., filed October 22, 2012)

SEC Charges Two in Michigan-based Fraudulent Securities Offering

The Securities and Exchange Commission recently announced that it filed a civil injunctive action against brothers James Mulholland and Thomas Mulholland accusing them of conducting a fraudulent, unregistered offer and sale of approximately $2 million in securities.

Final Judgments Entered Against Derek F.C. Elliott

On October 5, 2012 the Honorable James C. Mahan, United States District Judge for the District of Nevada, entered a Final Judgment against Derek F.C. Elliott (Elliott).

On May 24, 2012, the United States Securities and Exchange Commission filed a complaint, in the United States District Court for the District of Nevada, against James B. Catledge, Derek F.C. Elliott, EMI Resorts (S.V.G.) Inc., EMI Sun Village, Inc. and Sun Village Juan Dolio alleging that James B. Catledge and Elliott, and certain of their related entities, made material misrepresentations to investors in connection with the unregistered sale of interests in two resorts in the Dominican Republic. The Final Judgment against Elliot seeks no civil penalty at this time, waives disgorgement and authorizes the Commission to seek a civil penalty of not more than $250,000 by subsequent motion.

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