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Business Observer Tuesday, Feb. 18, 2020 1 month ago

Area real estate firm, CEO face fraud charges in alleged $170M scheme

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The SEC says Tampa-based EquiAlt perpetuated a $170 million Ponzi scheme.

TAMPA — The Securities and Exchange Commission has charged EquiAlt LLC and its top leaders, CEO Brian Davison and Managing Director Barry Rybicki, in what it says was a fraudulent and unregistered securities offering that raised more than $170 million from at least 1,100 investors.

The SEC’s complaint, filed in the U.S. District Court for the Middle District of Florida, says a number of the alleged victims of the scam had invested their retirement funds with Tampa-based EquiAlt.

According to a press release issued by the SEC, investors were told EquiAlt would pool their funds and use approximately 90% of the money to purchase undervalued real estate, rent or flip the properties and then pay investors 8-10% annual interest generated from the real estate investments.

However, the release states, the SEC alleges the majority of the funds were used to support Davison’s and Rybicki’s lavish personal spending. In addition, money from one investment fund controlled by EquiAlt was allegedly used to make Ponzi-like payments to investors in another fund.

On Friday, a federal judge granted the SEC’s request for emergency relief, including a temporary restraining order, an asset freeze, an order against the destruction of documents and an accounting against EquiAlt, Davison, Rybicki and a number of companies charged by the SEC as relief defendants.

“We allege that Davison and Rybicki made ‘too good to be true’ promises about nearly every material aspect of EquiAlt’s business to induce retail investors, including elderly individuals, to invest with them,” states Eric Bustillo, director of the SEC’s Miami Regional Office, in the release. “The SEC’s emergency action seeks to prevent further harm to these retail investors and locate and preserve as many assets as possible.”

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