A Utah-based real estate investment firm and its principals allegedly bilked investors out of $27 million in a giant Ponzi scheme. Investors apparently fleeced in the deal filed a federal civil lawsuit charging the Madison Real Estate Group with taking investments and defrauding the investors by filing false tax returns, holding double closings and taking substantial commissions. Madison Real Estate principals Richard Higgins, Brandon Higgins, Allen Christensen and several banks, title companies and legal firms were all complicit in the fraud, the suit alleges.
The lawsuit alleges that the group purchased properties and then resold them for far more than reported, hiding the amounts from investors and pocketing the difference. The group also purchased and held onto rental properties with the promise of paying investors a monthly percentage, but instead neglected the properties and allowed them to fall into disrepair. Initial investors were paid not with rental incomes, but with new money received from subsequent investors. Once the scheme was exposed, none of the investors were paid, leaving them to suffer huge losses, according to the suit.
The lawsuit alleges that the Madison Group and its principals worked in tandem with the banks, including Bank of America, Lehman Brothers Bank, Aurora Bank and several others, to obtain commercial loans using investor’s money as collateral.
The Madison Group purchased and resold over 20 apartment complexes, each time reporting smaller profits to investors, but keeping the difference. Richard Higgins was no stranger to securities fraud, having previously been convicted of securities fraud, according to the lawsuit.
Some Ponzi schemes like this one can involve multiple layers of organizers with various levels of guilt or liability. Straw buyers may not know of the fraudulent real estate transaction or are duped into participating. If you have been accused of involvement in a fraud scheme or you believe you are under investigation, you need serious legal help. Contact an experienced criminal defense attorney.
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