SEC Charges Three Texans and Related Entities in $45 Million Ponzi SchemeFriday, February 8, 2019
The Securities and Exchange Commission (SEC) recently filed emergency charges against Texas real estate developer Phillip Michael Carter and several other individuals and entities in connection with a $45 million Ponzi scheme.
According to the SEC litigation release on January 29, 2019, the SEC is seeking emergency action against the following individuals and entities:
- Phillip Michael Carter
- Bobby Eugene Guess
- Richard Gregory Tilford
- North Forty Development Capital
- North-Forty Development, LLC
- North Forty Development LLC
- Texas Cash Cow, LLC (f/k/a Texas Cash Cow Investments, LLC)
- Texas First Financial, LLC
- Frisco Wade Crossing Development Partners, LLC
- McKinney Executive Suites at Crescent Parc Development Partners, LLC
- Christian Custom Homes LLC
- Double Droptine Ranch, LLC
The SEC complaint alleges that Carter, Guess and Tilford raised nearly $45 million from over 270 investors across the U.S. by selling short-term, high-yield promissory notes issued by several shell companies intentionally named to confuse investors. Carter Guess, and Tilford claimed to offer investments in Carter’s real estate business. Instead, they allegedly sold securities by unrelated and closely-named entities that had no assets. The SEC claims that Carter then misappropriated investors’ funds to support his lavish lifestyle, including using millions of dollars of investors’ funds to operate his private jet and a 1,000-acre hunting ranch he named the Double Droptine Ranch, and to repay a $1.2 million IRS tax lien. Carter also allegedly used these funds to make over $3 million in Ponzi payments to investors.
The SEC is seeking relief from these individuals and related entities through permanent injunctions, disgorgement, prejudgment interest, and civil penalties. The SEC is also seeking disgorgement and prejudgment interest from four relief defendants. Finally, the SEC requested that the Court freeze Carter’s assets, order him to give an accounting, and issue him a document preservation order.
The Texas State Securities Board is also pursuing criminal charges against Carter and Tilford, who were indicted on November 6, 2018 for securities fraud, sales of unregistered securities, and sales of securities by an unregistered agent or dealer, among other things.
Were you a victim of Phillip Carter, Bobby Guess, and Richard Tilford’s alleged Ponzi scheme at the advice of an attorney, a broker, insurance agent, CPA, or financial advisor? If so, we may be able to help you recover the money you lost. Our team of attorneys has been fighting for victims of investment fraud and broker misconduct since 1998. If you need advice from an attorney who will fight for you, call ChapmanAlbin LLC (1-877-410-8172) for a free, no-obligation consultation.