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.
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