SEC Charges Utah Man with Defrauding Investors in a Real Estate Ponzi Scheme
The Securities and Exchange Commission has charged Landon M. Smith of Salt Lake County, Utah with operating a real estate offering fraud and Ponzi scheme.
The Securities and Exchange Commission has charged Landon M. Smith of Salt Lake County, Utah with operating a real estate offering fraud and Ponzi scheme.
According to the SEC’s complaint, from at least December 2016 through April 2018, Smith operated a fraudulent scheme that raised nearly $2.5 million from more than 50 investors.
Smith allegedly told investors that he was a real estate wholesaler who used investor funds for earnest money to purchase and then quickly resell properties, and promised investors returns of up to 100 percent.
The SEC’s complaint alleges that Smith never purchased the purported properties, and instead used new investor funds to pay returns to earlier investors in classic Ponzi scheme fashion and to pay his personal expenses, including his rent and trips to Hawaii.
To conceal his fraudulent scheme, the SEC also claims Smith created false real estate contracts with forged property owner’s signatures.
The SEC’s complaint, filed in U.S. District Court for the District of Utah, charges Smith with violating the antifraud provisions of federal securities laws. He has agreed to a bifurcated settlement where he will be permanently enjoined from violating these provisions, upon court approval. The issues of disgorgement, prejudgment interest, and a civil penalty will be determined by the court.
In a parallel action, the U.S. Attorney’s office for Utah announced criminal charges against Smith.
