SEC Charges Michigan Men Of Scamming Elderly Investors In Ponzi Scheme
At least 440 investors, many of whom were elderly individuals and retirees, found themselves duped in a $50 million real estate investment deal that turned out to be a Ponzi scheme. On July 28, the Securities and Exchange Commission (SEC) obtained a court order to halt the alleged scam, freezing the assets of the alleged perpetrators – John J. Bravata and Richard J. Trabulsy of Michigan – as well as the companies they formed, own, and control: BBC Equities LLC and Bravata Financial Group, Inc.
According to the SEC, the two men raised more than $50 million from investors by offering them membership interests in a purported real estate investment fund with promised annual returns of 8 to 12%. However, less than half of the money raised was actually spent acquiring real estate. Instead, Bravata and Trabulsy used money from new investors to make Ponzi-like payments to earlier investors. They also spent several million dollars of investors’ money on themselves, financing exotic vacations, gambling debts and other extravagant items.
The SEC’s complaint, filed in U.S. District Court for the Eastern District of Michigan, also charges Bravata’s son, Antonio Bravata of Brighton, of selling the unregistered securities and acting as an unregistered broker.
