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SEC halts alleged Ponzi scheme in Detroit

July 31st, 2009

Before You Invest

The Securities and Exchange Commission (SEC) has moved to halt a Ponzi scheme that is allegedly being conducted by two firms in Detroit.

It has obtained a court order against Michigan residents John Bravata and Richard Trabulsy after they were accused of misusing investors’ money.

The pair obtained over $50 million from more than 440 investors who believed they were buying into a real estate fund that offered annual returns of up to 12 per cent.

However, at least half the money was used to make payments to early investors, with a proportion of it being spent on personal items, the SEC states.

“Investors thought they were investing in a safe and profitable real estate investment fund,” Merri Jo Gillette, director of the SEC’s office in Chicago, stated.

Posted in Finance Fraud, Fraud, Ponzi Scheme

Tags: 50 Million, Bravata, Gillette, Investing, Investors, Michigan Residents, Money, Ponzi Scheme, Proportion, Real Estate Fund, Real Estate Investment, Real Estate Investment Fund, Sec States, Securities And Exchange, Securities And Exchange Commission

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SEC Halts $50 Million Ponzi Scheme

July 29th, 2009

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The U.S. Securities and Exchange Commission said it halted a $50 million Ponzi scheme near Detroit that raised money for a real-estate investment fund and targeted the elderly.

A federal judge in Michigan agreed to freeze assets after the SEC sued John Bravata, 41, and Richard Trabulsy, 26, claiming they lured more than 400 investors by promising 8 percent to 12 percent annual returns, the agency said today in a statement.

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Posted in Finance Fraud

Tags: 1 Million, 50 Million, Assets, Bravata, Exotic Vacations, Federal Judge, Ferrari, Gambling Debts, Gillette, Jewelry, Luxury Homes, Maserati, Merri, Mortgage, Prospective Investors, Real Estate Investment, Real Estate Investment Fund, Regional Office, Securities And Exchange, Securities And Exchange Commission

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Free Capitalist host charged with $100m Ponzi scheme

June 2nd, 2009

Before You Invest

A Utah businessman and host of the Free Capitalist radio show has been indicted by a federal grand jury over allegedly running a $100 million Ponzi scheme.

Claud Koerber, also known as Rick Koerber, faces charges of mail fraud, wire fraud and tax evasion.

He is alleged to have obtained the money through loans for Founders Capital, a subsidiary of his Provo-based real estate firm FranklinSquires.

According to the indictment, over $50 million was used to pay earlier investors to give the “false impression” that his businesses were profitable and their investments were secure, the Star-Tribune reports.

Mr Koerber is also accused of using investors’ cash to fund personal interests, including investing $850,000 in restaurants, $1 million in luxury automobiles and $5 million in filmmaking.

On his official site, Mr Koerber describes himself as a “capitalist, Mormon [and] dad”.

He started the daily Free Capitalist talk radio show in 2005.