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SEC Charges Firm In $600 Million Real Estate Ponzi Scheme, Linked To Florida

On October 13th, 2022, the Securities and Exchange Commission (SEC) announced securities fraud charges against a New Jersey-based real estate development firm and four of its executives. The SEC alleges that more than 2,000 investors were affected by a $600 million real estate Ponzi scheme.

The securities fraud scheme has links to real estate investment properties in several states, including in Florida. Within this article, our Miami Ponzi scheme attorney provides a more detailed overview of the SEC’s securities fraud charges.

SEC Charges: National Realty Investment Advisors LLC (NRIA) Ponzi Scheme 

In the United States District Court for the District of New Jersey, the SEC has filed investment fraud charges against National Realty Investment Advisors LLC (NRIA) and four of its top corporate executives. The individuals named in the securities fraud lawsuit are as follows:

  • Rey E. Grabato II of New Jersey;
  • Arthur S. Scutaro of New Jersey;
  • Thomas Nicholas Salzano of New Jersey; and
  • Daniel Coley O’Brien, of New York.

According to the SEC’s complaint, NRIA was involved in a “Ponzi-like scheme.” In total, around $600 million was raised from more than 2000 different investors across the United States, including in Florida. The SEC notes that real estate investments were used as the “hook” for the Ponzi scheme.

 A Nationwide Campaign Promises 30 Percent Annual Returns

 The SEC contends that National Realty Investment Advisors LLC (NRIA) and its executives engaged in a “classic” Ponzi-like scheme. They solicited investors nationwide by promising safe, secure 30 percent annual returns in real estate development projects in New York, New Jersey, Pennsylvania and Florida. However, investor funds were largely siphoned off. Funds of new investors were also used to pay distributions to the previous investors.

 Real Estate is Often Used to Lure Investors into Fraud Schemes 

It is not uncommon for the perpetrators of securities fraud schemes to use real estate as a “hook” to try to lure unsuspecting investors into fraud schemes. A key reason for this is that real estate is widely considered to be a “safe” investment. As such, real estate can serve as a way for bad actors to get investors into a Ponzi scheme. Indeed, promoters of fraudulent investment schemes may try to entice investors by offering them the opportunity to invest in what they claim is a “sure thing”—such as a real estate development project. Unfortunately, the reality may be far different.

 Contact Our Florida Real Estate Ponzi Scheme Attorney Today

At ​Carlson & Associates, P.A., our Florida securities fraud lawyers have the skills and experience to represent investors in the full range of Ponzi scheme cases. If you suffered financial losses in a real estate Ponzi scheme, our investment fraud team is here as a resource. Call us today to arrange your fully confidential case review. With a law office in Miami, we handle real estate Ponzi schemes in Miami-Dade County, South Florida, and in communities across the wider region.

Source:

sec.gov/news/press-release/2022-188

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