Cabot Investment Properties and its principals, Carlton Cabot and Timothy Kroll, were charged with real estate fraud after allegedly loosing investor money in fraudulent tenancy-in-common (TIC) deals. The investors were looking for retirement income and invested over five million dollars in eight different fraudulent TICs, causing them to lose their money. The Secretary of the Commonwealth, William Galvin, also charged the defendants with funneling $9 million of investor funds into their own personal accounts, which he believes to have funded their lavish lifestyles.
Max E. Zavanelli, a Florida based money manager, was banned from the securities industry. An administrative law judge found that the SEC presented sufficient evidence to establish that Zavanelli provided misleading information to Morningstar. Zavanelli and his firm, ZPR Investment Management Inc., were also required to pay a fine totaling $660,000. The SEC believes that Zavanelli falsely reported his firm's compliance with the Global Investment Performance Standards in newsletters and advertisements. According to an Investment News report, Zavanelli refused to take responsibility for any of the allegations and was said to be extremely defiant throughout all the proceedings.
Chicago advisor Neal Goyal and his investment firms Caldera Advisors, LLC and Blue Horizon Asset Management, LLC are facing fraud charges after allegedly operating a Ponzi scheme. According to the SEC, Goyal falsely told investors that all of their money would be placed into funds that were invested in stocks. Goyal provided investors with false account statements and used new investor money to pay the older investors. An Investment News article reports that Goyal had accepted $11.4 million from 35 clients. He allegedly used the money on personal items including luxury cars, two homes and his wife's business ventures.
After a forty-two day trial, four DBSI principals were found guilty of fraud by a Boise federal jury. Douglas Swenson, Mark Ellison, David Swenson, and Jeremy Swenson were convicted of multiple fraud charges. These charges stemmed from them publically relaying that DBSI was a profitable enterprise with a net worth totaling over a $100 million, but in reality DBSI was an unprofitable Ponzi scheme. All four defendants were convicted of forty-four counts of securities fraud and will be sentenced in late August.