Скачать или смотреть REAL ESTATE INVESTING FRAUD | $$$ MILLIONS LOST | Private Equity Investment Fund Manager Arrested

Unfortunately, Real Estate Investing Scams and Fraud are a real fear for many Real Estate Investors, especially for newer investors. Real Estate Investing for Beginners is scary in large part due to the private equity and hedge fund managers that get caught running fraudulent funds and investing scams, and then get splashed across the media. For the most part, these scammers are the rare exception, rather than the norm. However, it is important to learn how these scams work so that we can learn how to spot them and avoid becoming a victim of fraud in the future. Connect with us on Instagram:   / confident_real_estate  

This video will give you a glimpse into a recent SEC investigation and the allegations of fraud against one such firm.

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The Securities and Exchange Commission announced Tuesday that real estate fund manager Eric C. Malley of MG Capital has been charged with defrauding investors and misappropriating funds. Malley allegedly misappropriated more than $7 million, while lying to investors about his investment management experience, their exposure to risk, and the firm’s capabilities.

According to the SEC's complaint, beginning in 2014, Malley - a licensed real estate broker with no investment management experience - and MG Capital solicited investments in two real estate funds, MG Capital Management Residential Funds III and IV, respectively, raising a total of $58 million primarily on the strength of a fabricated investment track record. The complaint alleges that, in marketing Funds III and IV, Malley and MG Capital falsely claimed that they had previously managed two highly-successful real estate funds with a combined portfolio value of $1.18 billion that had significantly outperformed the S&P 500 Index over a ten-year period when, in fact, those prior funds never existed. According to the SEC, Malley and his firm blatantly promised investors that their capital was “100% protected from loss.” In general, if something sounds too good to be true, that's because it is. Statements like your investment being 100% protected from loss should immediately raise red flags and at least put you on notice that serious due diligence on your part is required.

Additionally, Malley and MG Capital allegedly claimed that investor capital was secured by a balance sheet valued at more than $250 million. Again, the SEC alleges that none of these claims were true—investors’ capital was indeed at risk and Malley did not have the successful experience he claimed. The complaint also alleges that more than $7 million in investor capital was misappropriated, and the firm of deliberately falsified financial reports and in order to deceptively conceal “huge losses.”

Many investors were initially shocked that Malley, a man who represented himself to be both experienced and transparent, deliberately lied about his firm’s finances in order to attract more investors.

The SEC is confident it has the evidence needed to obtain a conviction. Specifically, they are charging Malley and MG Capital with violating anti-fraud provisions established in the Securities Act of 1933 and the Securities Exchange Act of 1934. Unfortunately, this is just one of many fraud cases that has been recently filed by the SEC. The events leading up to the housing crisis of 2008 have caused the SEC to pay particularly close attention to firms involved in the real estate industry. Furthermore, with real estate investment opportunities being extended to the general public via the JOBS Act in 2012, malicious and predatory fundraising methods are being taken exceptionally seriously.

LINK to the S.E.C. Press Release: https://www.sec.gov/litigation/litrel...

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