The SEC put a stop to a $50 million real estate focused Ponzi scheme that targeted elderly investors in the Detroit area.
John Bravata and Richard Trabulsy apparently lured more than 400 elderly investors with the promise of safe 8% - 12% returns. Many of the investors were solicited with "free lunch" seminars.
The reality of the situation, however, was very different than what was promised:
The men “lied” to prospective investors about the use of funds and spent $7.2 million buying a $85,000 Maserati, a $90,000 Ferrari, and paying about $80,000 on jewelry and almost $1 million on the mortgage for a vacation house, the SEC said. Trabulsy and Bravata made $11.3 million in Ponzi payments to earlier investors, the SEC said.
Source: Bloomberg
Glossary:
Key Phrases:
- Log in to post comments
