why being ponzi fraud from real estate fund/syndication is not that bad after all

[Carlos Ptriawan]

so in 2018 i invested to one fund that's offering regular decent cashflows. They have REIT/syndication/fund with residential as underlying asset so it seems legit. At that time I am not sophisticated enough. I know their offering from their sales associate that's coming to our office and so on. I just know later that that process of soliciting. business without registered brokerage license is illegal activity. The offering is real estate fund, from fund 1 to fund 5, last availabl fund is fund 5. In 2020, the SEC is issuing lawsuit for ponzi scheme., basically investor in fund 5 is paying fund 4 investor and so on. However, before the lawsuit, I'm diligently checking their asset value, because 100% of their properties are residential, I see their asset valuation is actually above their liability. The lawsuit is so large that it includes the brokerage and some accounting firm, and some some very big name in the industry. After lawsuit, the properties are handled by receivership that's handled by SEC.

Now after three years of selling all asset, guess what, all investors are receiving 95% of their money back. I think this is proven that even in ponzi criminal case, if asset has good valuation and the law is being done properly, we will get our money back as investor.

[Chris Seveney]

Quote from @Carlos Ptriawan:

so in 2018 i invested to one fund that's offering regular decent cashflows. They have REIT/syndication/fund with residential as underlying asset so it seems legit. At that time I am not sophisticated enough. I know their offering from their sales associate that's coming to our office and so on. I just know later that that process of soliciting. business without registered brokerage license is illegal activity. The offering is real estate fund, from fund 1 to fund 5, last availabl fund is fund 5. In 2020, the SEC is issuing lawsuit for ponzi scheme., basically investor in fund 5 is paying fund 4 investor and so on. However, before the lawsuit, I'm diligently checking their asset value, because 100% of their properties are residential, I see their asset valuation is actually above their liability. The lawsuit is so large that it includes the brokerage and some accounting firm, and some some very big name in the industry. After lawsuit, the properties are handled by receivership that's handled by SEC.

Now after three years of selling all asset, guess what, all investors are receiving 95% of their money back. I think this is proven that even in ponzi criminal case, if asset has good valuation and the law is being done properly, we will get our money back as investor.

 I am working on a website right now that will highlight data from the SEC for those funds that have red flags. Hopefully I can continue to educate people on what to look for. We are seeing many funds here on BP right now go from one to the other when they are not paying investors in the other fund. That to me is a huge red flag, but investors will still invest because they like their youtube videos.