With the Securities and Exchange Commission back up and running, we are seeing new enforcement actions coming out. A real estate fraud caught my attention.
The SEC charged Phillip Michael Carter, Bobby Eugene Guess and Richard Tilford with raising almost $45 million from over 270 investors by selling short-term, high-yield promissory notes issued by shell companies that were intentionally named to confuse investors.
After reading the complaint, it seemed to me to be a run-of-the-mill real estate fraud. The promise was a low-risk investment backed by hard assets. The truth was a hit or miss collection or real estate assets, big commissions and pilfering of the funds for personal use.
The pitch likely had lots of red flags. The big one for me was that on of the main entities involved was called “Texas Cash Cow.” Investor gave the company placed almost $10 million with it. It turned out to be a cash cow for fraudsters instead of the investors.
Sources:
1 thought on “Real Estate Cash Cow”