Posted by: John_Hamilton on 08/23/2012 02:41 PM
Updated by: John_Hamilton on 08/23/2012 02:41 PM
Expires: 01/01/2017 12:00 AM
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Attorney General Kamala D. Harris Announces Arraignment of Individuals in $3.2 million Real Estate Investment Scam
Sacramento, CA...Attorney General Kamala D. Harris today announced the arraignment of two Sacramento men who stole more than $3.2 million from investors who were told their money was being invested in a real estate venture to buy and re-sell foreclosed homes....
“These individuals fraudulently represented themselves as a legitimate business but had no intentions of carrying out what they promised,” said Attorney General Harris. “They will be held accountable for the damage they inflicted on trusting investors.”
Taze Claiborne “TC” Ellis, 45, and his son, Taze Jordan “TJ” Ellis, 23, both of Sacramento, were arraigned August 16 in Sacramento County Superior Court after being arrested on August 14. The elder Ellis was charged with 32 felony counts of grand theft and securities fraud, and his son was charged with four felony counts of grand theft and securities fraud. After a bail hearing on Wednesday, bail for the elder Ellis was confirmed by the judge at $3.2 million. Bail for his son is $40,000.
From May 2008 through September 2009, Taze Claiborne Ellis sold securities in the form of real estate investment contracts to seven investors in California and other states. He told investors their money would be used to purchase foreclosed homes at low cost in order to refurbish them to sell for significant profit. Instead, Ellis used the investment money for his personal expenses, to pay unrelated third parties, and to transfer into foreign currency trading platforms.
To keep up the façade that their money had been invested, Ellis paid “returns” to investors out of funds he received from other, unrelated third parties. In some cases, he paid investors with their own money.
In October 2008, Taze Jordan Ellis, promised to invest $40,000 of an investor’s money in the foreign currency market. He promised annual returns of 60 percent over five years. Instead, he deposited the money into his bank account and spent at least half of it on personal expenses.
Neither of the defendants, nor the businesses where investors wired their funds – Blacksand, Inc. and FXKB, Inc. – are registered to sell securities in California. Further, Taze Claiborne Ellis did not disclose to victims that he was convicted in 2002 of grand theft and tax fraud, for which he was sentenced to a 4-year prison term.
The Attorney General’s eCrime Unit conducted the investigation. The case will be prosecuted by the Attorney General’s Special Crimes Unit.
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