Home News SEC Charges Founders of a Real Estate Crowdfunding Portal with Fraud

SEC Charges Founders of a Real Estate Crowdfunding Portal with Fraud

The Securities and Exchange Commission has charged the co-founders of a New York-based crowdfunding portal with misappropriating more than $1 million from investors.

The Securities and Exchange Commission has charged the co-founders of a New York-based crowdfunding portal with misappropriating more than $1 million from investors.

The SEC alleges that William Skelley and Sohin Shah, the co-founders and senior executives of iFunding LLC, raised more than $3 million from 42 investors in 17 states, with fraudulent claims about iFunding’s plans to use the funds to build an online real estate equity crowdfunding portal. According to the complaint, the pair diverted more than $1 million of investor funds for their personal use.

The complaint also alleges that Skelley made materially false and misleading oral statements to investors and later, he and iFunding LLC used two private placement memoranda to solicit investors.

The PPMs allegedly contained false statements about the use of funds and misrepresented the number of real estate projects that iFunding had financed, and the amount of funds that had been raised on its portal.

The SEC’s complaint seeks injunctions, the return of allegedly ill-gotten gains plus interest, and civil monetary penalties against both defendants.

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