$50 million Ponzi Scheme Alleged in Detroit


 DETROIT (CN) - Two men who masterminded BBC Equities

and Bravata Financial Group stole $50 million from

hundreds of people in a Ponzi scheme, a class action

claims in Federal Court.

The SEC also has sued John Bravata and Richard Trabulsy,

who promised 8 to 12 percent returns in

a real estate scam, guaranteeing "safer returns

than other investment options," according to the complaint.

The class claims that Bravata, 41, and Trabulsy, 26,

stole their money and spent more than $7 million of it

on homes, jewelry, cars, vacations and other luxuries.

Bravata used money from his first two investors

to buy a $90,268 Ferrari, according to the complaint.

To "keep the scheme afloat" they spent $14 million soliciting

new investors, $11.3 million of new money to pay off

earlier investors, and $21 million to buy properties

that are "highly leveraged, with mortgages and

other liabilities exceeding $128 million,

" the complaint states.

And the class claims that Bravata and Trabulsy

transferred BBC assets to other ventures

to continue the scheme and

"protect their ill-gotten gains."

Bravata was so bold as to name BBC for

the "Billionaire Boys Club - an apparent reference

to a 1980's-era Ponzi scheme that began with

high-living fraudsters and devolved into

recriminations, murder and an

NBC miniseries," according to the complaint.

The named plaintiff, J. Lincoln Crocker, says

he lost $250,000 after he was solicited by his friend,

"longtime associate" and now defendant

Aaron Simon, who worked for Bravata and Trabulsy.

Bravata and Trabulsy began by soliciting family

and friends for money, then began holding

"free lunch" seminars each week to target

senior citizens, Crocker says.

Half of BBC's money allegedly came

from IRA accounts.

The class also claims that BBC and its founders

falsely advertised on its Web site that its

"current real estate portfolio exceeded $400 million,

" and in Forbes Magazine, where they said

"Bravata's net worth exceeded $54 million.

" Bravata falsely claimed that he had published

several books as well, including

one titled "The Stealing of Wealth in America,"

according to the complaint.

Named as defendants are BBC Equities,

Bravata Financial Group, BBC Capital,

BBC Holdings 1-50, BBC Holdings I-XI,

Ferndale Lofts, Phoenix Venture Capital,

Equity Trust Company, John Bravata,

his son and employee Antonio Bravata,

his wife Shari Bravata, Richard Trabulsy

and Aaron Simon.

The class is represented by

Christopher Kaye with Miller Law in Rochester, Mich. 

Link here

             J-L K.
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