Military families burned in scam

Feb 28, 2008 @ 11:27 am

By Andrew Coen

The Securities and Exchange Commission has charged three promoters who targeted military families in a multi-million dollar real estate investment scheme.

The regular alleges that the scam forced victims into personal bankruptcy and their homes into foreclosure.

The scheme, which largely targeted families in Southern California and Arizona, cost more than 75 investors an estimated $10 million according to the SEC complaint.

James B. Duncan, Hendrix M. Montecastro and Maurice E. McLeod are accused of soliciting investors by using sham investment seminars and “referral partners.”

The complaint alleges that the three promoters gained control over investors’ finances by offering them securities in the form of real estate investment contracts, promising that the money earned would help make mortgage payments on investment homes purchased on their behalf.

Instead of investing the client funds as promised, however, the three used the money from new investors to make mortgage payments on previously purchased investment homes according to the SEC.

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