A former investment adviser and head of a real estate trade association pleaded guilty last month in federal court in Minneapolis to defrauding investors of $1.1 million.
Renee Marie Brown, 48, was the head of the Real Estate Investment Securities Association until April 2010, when the Securities and Exchange Commission filed civil charges against her in connection with the scheme.
The SEC said at that time that Ms. Brown had a number of prior broker-dealer and investment adviser affiliations. She was also one of the founders of FactRight LLC, a consulting group that vets private placements and real estate deals.
“Her criminal activity did not occur when she was president of REISA, as far as we know,” said Brandon Balkman, its chief executive. But the accusations were lodged while Ms. Brown was president, and she immediately resigned, he said.
"ROGUE PARTNER'
“FactRight terminated the relationship with Ms. Brown immediately, and she was viewed as a rogue partner,” said Tony DeFazio, a spokesman for FactRight.
“The issues of concern occurred outside of FactRight and were associated with her wealth management firm,” he said. “FactRight has never been contacted by federal officials about the allegations stemming from the verdict.”
According to a statement from the U.S. Attorney's Office in Minneapolis, Ms. Brown admitted that on July 1, 2009, she created Investors Income Fund X, a limited liability company in South Dakota. Before that, in June 2009, she contacted investors encouraging them to invest in Fund X, according to the statement.
Ms. Brown also admitted that she falsely told investors that the fund was a bond fund with an 8% or 9% rate of return, and that she had invested $200,000 of her own money in it. In truth, she never invested any money, and the fund wasn't a bond fund, according to the statement.
Ms. Brown faces a maximum penalty of 20 years in prison.
[email protected]
