I don't know why I can't find this online at the OCR but it was in the print edition yesterday. This I think this qualifies for an "Asshat" award. Especially since one involved has had his home mentioned here. This isn't the first time for these guys to be in trouble.
SEC files fraud suit against Irvine company
Agency alleges it ran a real estate scheme that paid most of its funds to boiler-room operators.
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By JOHN GITTELSOHN and ANDREW GALVIN
THE ORANGE COUNTY REGISTER
A federal lawsuit was filed against an Irvine real estate firm accused of running boiler-room operations in a $50 million real estate fraud scheme. The Securities and Exchange Commission alleges that Real Estate Partners Inc. failed to disclose that 52 percent of its funds raised from 1,600 investors went to commissions. The complaint says $10.9 million went to Michael P. Owens and $3 million went to Donald G. Ryan, 42, alleged to be boilerroom operators from Newport Coast and Irvine, respectively.
Others named in the lawsuit: Dawson Davenport, president of Real Estate Partners, 51, of Lake Forest; and salesmen Richard McGill, 58, of Laguna Niguel; William L. Sanders, 56, of Norco; Michael Tuchman, 38, of Irvine; and Danny Rayburn, 47, of Westminster.
Attorneys for Davenport and Owens declined to comment. Attorneys for other defendants could not be reached for comment.
The complaint alleges that Real Estate Partners ran a Ponzilike scheme, paying dividends to investors with funds raised from other investors. “As demonstrated by this action, investors should always be wary whenever they receive an unsolicited phone call from a high-pressure salesperson,” said Rosalind R. Tyson, acting director of the SEC’s Los Angeles regional office.
“Boiler-room personnel are adept at manipulating investors to convince them to invest in fraudulent schemes.”
