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.
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