Linus Unah – Fourth Estate Contributor
Washington, D.C., United States (4E) – The U.S. Securities and Exchange Commission (SEC) has charged a Southern California man with defrauding investors and misappropriating more than $1.3 million from Caliber Partnership I LLC.
The SEC alleged that Paul A. Garcia of Newport Beach, California, raised $675,000 from 13 investors in 2014 and 2015 by claiming that Caliber, a real estate investment fund he controlled, would use their money to purchase an unfinished golf resort and then join a large real estate venture that was poised to go public.
But as investor money came in, the SEC said, Garcia caused Caliber to borrow heavily to finance two real estate purchases and misappropriated more than $1.3 million of the borrowed funds and investor funds through separate companies he controlled.
The SEC further alleged that Richard T. Woods of Southlake , Texas, misrepresented Caliber’s prospects in marketing materials that he authored and Garcia approved and used to attract investors.
According to the SEC’s complaint, filed in a federal court in California, the victims of the fraud included an eighty-two-year-old who lost $250,000.
To settle the charges, Garcia, Caliber, and the other companies involved in the fraud, have agreed to pay a total of more than $3.3 million in penalties and disgorgement of ill-gotten gains plus interest.
Garcia also agreed to a court order prohibiting him from participating in securities offerings and from serving as an officer or director of a public company.
Woods agreed to pay a penalty and disgorgement totaling about $30,000.
All settling parties agreed to the sanctions without admitting or denying the allegations in the complaint.
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