Real Estate Developer Pleads Guilty in $50 Million Securities Fraud Scheme
|U.S. Department of Justice May 08, 2014|
WASHINGTON—A commercial real estate developer pleaded guilty to his role in a $50 million securities fraud scheme, announced Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division and U.S. Attorney Laura E. Duffy of the Southern District of California.
Bradley Holcom, 55, entered his plea before United States District Judge Cathy Ann Bencivengo in San Diego, admitting that he committed wire fraud in connection with the sale of approximately $50 million worth of promissory notes that he sold to investors located throughout the United States.
According to court documents, Holcom solicited investors to provide funds for commercial and residential development through an investment program he operated called the Trust Deed Investment Program. Holcom falsely told investors who purchased notes through the Trust Deed Investment Program that they would receive a lien on a specific piece of property he was developing and that the lien would enable them to take priority over any other potential liens or interests in the property.
However, Holcom admitted that he never provided investors with a lien in the property he was purportedly developing and instead conveyed to investors a lesser interest that did not allow them to foreclose on the property to protect their investment. In addition, while he promised investors that their purported lien would be in first position, he subsequently solicited investments for properties that he knew were already encumbered by first position liens. Holcom also sold properties that were supposedly serving as security for investors without informing investors that the property they had financed for development was sold. In 2008 and 2009, he continued to solicit investors for new funds by making misrepresentations about his true financial condition and the manner in which he was using investor money.
As part of his plea, Holcom admitted that his conduct caused approximately $50 million in losses to over 50 victims. Sentencing is scheduled for July 25, 2014.
This case was investigated by the FBI’s Phoenix Division-Yuma Resident Agency. The case is being prosecuted by Trial Attorney Henry P. Van Dyck and Deputy Chief Daniel Braun of the Criminal Division’s Fraud Section and by Assistant United States Attorney Mark Pletcher of the United States Attorney’s Office for the Southern District of California. The Department appreciates the substantial assistance of the U.S. Securities and Exchange Commission.