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BBC Equities CEO Arrested In Scheme To Defraud Investors At JFK Airport By Daniel Baxter |
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May 8, 2011 - John Bravata, the founder and chairman of
BBC Equities, LLC, was arrested Thursday at JFK
International Airport, announced U.S. Attorney Barbara
L. McQuade. Bravata was arrested on an inbound flight
from Italy.
Bravata was charged in a criminal complaint with wire
fraud in connection with his solicitation of investor
funds for BBC, which Bravata characterized as a real
estate investment fund. The complaint charges that from
2006 through 2009, Bravata knowingly participated in a
scheme to defraud investors.
Bravata and those working on his behalf made multiple misrepresentations to numerous prospective investors, including misrepresentations regarding how their investment funds would be utilized, the security of funds invested with BBC, and the returns that could be expected by investors of BBC. Bravata also misled investors by telling them that managers of BBC would not earn money unless BBC was profitable. He also represented that the managers of BBC did not take fees, commissions, or a salary. |
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In reality, Bravata and others received lucrative compensation
from BBC and related entities despite that fact that BBC was
never profitable. Bravata also used investor funds to pay for
the construction of his roughly 18,000 square foot personal home
and to pay for other personal expenses. The charge in the
complaint, wire fraud, carries a maximum penalty of 20 years?
imprisonment and a $250,000 fine.
On July 27, 2009, the SEC obtained an asset freeze and temporary
restraining order against John J. Bravata and Richard J.
Trabulsy, and their companies, BBC Equities, LLC (BBC) and
Bravata Financial Group, Inc. (BFG), in connection with an
alleged Ponzi scheme. The SEC also obtained an asset freeze
against Antonio M. Bravata, John Bravata's son, and named John
Bravata's wife, Shari A. Bravata as a relief defendant. According the complaint, the defendants raised more than $50 million from at least 440 investors by offering them membership interests in a purported real estate investment fund with promised annual returns of 8 to 12 percent. The SEC alleges that although the defendants told prospective investors that BBC was a real estate investment fund and safe investment vehicle, they spent no more than $20.7 million of the money raised on real estate acquisitions. |