The US Securities and Exchange Commission (SEC) recently accused a Tampa real estate investment firm and its founder of operating a Ponzi scheme. Federal regulators have sued EquiAlt and its owner and chief executive officer, Brian Davison, alleging that they raised $170 million from approximately 1,140 investors and then misappropriated millions of those dollars to pay for chartered jets, collector wristwatches, and sports cars. Federal regulators also charged managing director Barry Rybicki in the scheme.
In a scenario that has become all too common when it comes to investments, it seems that EquiAlt and its founder, as well as other members of the company, created a Ponzi scheme. US District Court Judge Mary Scriven has frozen EquiAlt’s assets and ordered the company not to destroy any documents. Judge Scriven has appointed a receiver to manage the company’s affairs while the case is pending.
According to Securities and Exchange Commissioner Miami regional director Eric I. Bustillo, “Davison and Rybicki made ‘too good to be true’ promises about nearly every material aspect of EquiAlt’s business to induce retail investors, including elderly individuals, to invest with them.” Bustillo goes on to say that the SEC’s emergency actions are an effort to prevent further harm to the investors and to locate and preserve as many assets as possible.
CEO Brian Davison sent a text message to the Tampa Bay Times that simply said, “we deny the allegations and look forward to our day in court.”
In 2015, the Times reported that EquiAlt’s business was related to snapping up distressed properties. CEO Davison said at the time that he launched the company as part of an effort to reinvent himself after his previous lending company did not work out. Davison’s lending company had to file for bankruptcy during the Great Recession.
Now, federal regulators say that EquiAlt and its leaders told investors that 90% of their money would be used to buy real estate in distressed markets. Allegedly, they told investors did they would earn 8% to 10% annually as those properties were rented or flipped. Federal regulators say that the company described opportunities as conservative, low risk, safe, and secure.
Regulators say that the reality is that less than half of the money gained from investors went into real estate, while company leaders used investor funds to pay themselves millions of dollars in undisclosed distributions.
Our readers may be most familiar with the term “Ponzi scheme” due to the case involving the infamous Bernie Madoff that was revealed in 2008. This was the largest Ponzi scheme on record and involved assets of approximately $50 billion.
If you have done business with EquiAlt, CEO Brian Davison, or managing director Barry Rybicki, you should speak to a qualified attorney as soon as possible. Regardless of where you are located, whether in Florida or anywhere in the United States, the team at Meyer Wilson is ready to help. Our goal is to recover your losses due to the ponzi scheme. We regularly handle matters related to Securities Litigation in arbitration concerning investment fraud and misconduct. We have a thorough understanding of Ponzi schemes and other related fraudulent activity. You can contact us by calling (614) 532-4576 or contact us online to speak confidentially with an attorney today.