Grapevine real estate fund executives found guilty of fraud – CBS Dallas/Fort Worth

GRAPEVINE, TX (CBSDFW.COM) –Four executives of a Grapevine-based real estate company were convicted of fraud on Friday, Jan. 21, U.S. Attorney for the Northern District of Texas, Chad E. Meacham, announced.

After a five-day trial and nearly 12 hours of deliberation, a federal jury convicted United Development Funding (UDF) CEO Hollis Morrison Greenlaw, partnership president Benjamin Lee Wissink, chief financial officer Cara Delin Obert and director of asset management Jeffrey Brandon Jester on ten counts.

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The charges included conspiracy to commit wire fraud affecting a financial institution, conspiracy to commit securities fraud and securities fraud.

“UDF leaders moved money from one fund to another without disclosing the mix to investors or regulators,” U.S. attorney Chad Meacham said.

“The Department of Justice takes financial irregularities seriously and we are proud to hold these defendants accountable for their crimes. After a long battle, justice has been served.

“These executives conspired to commit multiple fraud schemes to mislead investors and the SEC, with losses of millions of dollars,” said Matthew DeSarno, special agent in charge of the FBI’s Dallas Division.

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“One of the FBI’s goals is to investigate corporate fraud in order to protect market integrity and investor confidence in US markets. I want to thank the agents, analysts, and forensic accountants who have spent years investigating these allegations, and our partners at the U.S. Attorney’s Office who have worked to bring justice to this case.

According to evidence presented at trial, the defendants orchestrated a scheme to mislead investors and the SEC about the performance of their funds.

UDF was founded in 2003 and is headquartered in Grapevine. He used a family of five funds – UDF I, II, III, IV and V – to invest in various residential property developers and private builders.

When the developers failed to repay the money they had borrowed from one fund, causing multi-million dollar shortfalls, the defendants transferred money from another fund in order to pay distributions to the investors of the original funds, all without disclosing the transfers to the SEC and the investing public. .

The defendants now face up to 25 years each in federal prison.

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The Dallas Field Office of the Federal Bureau of Investigation conducted the investigation. Assistant U.S. Attorneys Tiffany H. Eggers (NDTX Criminal Chief), Rachael Jones, Elyse Lyons, and Errin Martin prosecuted the case. U.S. District Judge Reed C. O’Connor presided over the trial.

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