According to reports, the Securities and Exchange Commission has accused a San Diego-based financial planning firm of running a real estate investment scam that raised approximately $50 million from hundreds of investors nationwide.
On Tuesday the SEC obtained a temporary asset freeze against the firm, Western Financial Planning Corp. (WFP), and its owner, Louis V. Schooler. The agency alleges that Western Financial and Schooler sold units in partnerships that Western had organized to buy vacant land in Nevada and hold for sale at a profit at a later date.
The SEC claims that WFP failed to tell investors that they were paying exorbitant mark-ups on the land, and in some cases, more than five times its fair market value. Schooler also allegedly kept from investors that the land held by the partnerships was often encumbered by mortgages that WFP used to help finance the initial purchase of the land.
The SEC’s complaint filed in federal court in San Diego alleges that WFP and Schooler have misled investors since 2007 by providing them with comparative prices or “comps” of supposedly similar plots of land that had sold for prices higher than those offered by WFP. However, the real estate comps provided were not comparable to the land sold by WFP.
A court hearing to rule on the SEC’s motion for a preliminary injunction is scheduled for Sept. 17.
The foregoing information is being provided by The White Law Group. The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Boca Raton, Florida.
For more information on the firm, visit https://www.whitesecuritieslaw.com.