SEC Charges Florida Firm with $170 Million Real Estate Investment Scam involving Elders.
According to the Securities and Exchange Commission yesterday, the regulator reportedly obtained a temporary restraining order and asset freeze against EquiAlt, a Florida-based private real estate firm in connection with the SEC’s allegations that the offerings were fraudulent unregistered securities that purportedly raised more than $170 million from at least 1100 investors, many of whom reportedly invested their retirement funds.
The SEC alleges that EquiAlt, its CEO ,and its managing director, and the entities they control, purportedly fraudulently raised millions of dollars by making material misrepresentations to investors about EquiAlt’s investment strategy, the financial condition of the investments, and the uses of investor proceeds.
According to the SEC’s complaint, EquiAlt and the two executives allegedly promised investors, many of them elderly, that substantially all of their money would be used to purchase real estate in distressed markets in the U.S. and their investments would yield high returns. Instead, according to the SEC’s complaint, they purportedly stole millions of dollars for their own personal use, allegedly using the money to buy luxury items such as Ferraris, Porsches, and a Rolls Royce and private jet charters, among others.
The executives purportedly told investors that their funds would be pooled and about 90% of the money would be used to purchase undervalued real estate, rent or flip the properties, and pay investors 8% to 10% annual interest generated from the real estate investments, the SEC said. But less than 50 percent of the funds raised were allegedly used to invest in properties. Instead, according to the complaint, a vast amount of investor money allegedly went to support the executives’ high end lifestyle.
Further, the complaint said that in April 2017, one executive purportedly took cash distributions from several of the funds totaling $1.8 million and allegedly used the money to pay personal back income taxes. Money from one investment fund controlled by EquiAlt was also allegedly used to make Ponzi-like payments to investors in another fund, according to the SEC.
The SEC said it is seeking disgorgement of allegedly ill-gotten gains, and financial penalties against the defendants. The SEC said its investigation is continuing.
The White Law Group is investigating potential securities fraud claims involving the liability that financial advisors or broker-dealers may have for improperly recommending the following EquiAlt private placement offerings:
EquiAlt Fund II, LLC
EquiAlt Fund, LLC
EquiAlt Fund III
EA SIP LLC
EquiAlt Qualified Opportunity Zone Fund, LP
EquiAlt Secured Income Portfolio REIT, Inc.
Recovery of Investment Losses in EquiAlt Funds
If you suffered losses investing in EquiAlt offerings, please call the securities fraud attorneys at The White Law Group at 888-637-5510 for a free consultation.
The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Franklin, Tennessee. We represent investors in FINRA arbitration claims in all 50 states including Florida. Our attorneys have recovered millions of dollars from many brokerage firms in the past.
For more information on The White Law Group, and its representation of investors, please visit www.WhiteSecuritiesLaw.com.
Tags: EA SIP LLC, EquiAlt complaints, EquiAlt fraud charges, EquiAlt Fund II LLC, EquiAlt Fund III, EquiAlt Fund LLC, EquiAlt investigation, EquiAlt losses, EquiAlt ponzi, EquiAlt Qualified Opportunity Zone Fund LP, EquiAlt real estate investments, EquiAlt recovery options, EquiAlt Secured Income Portfolio REIT Inc. Last modified: February 19, 2020