3 Studio City-Based Businesses Named in Investment Scam

The 10-count indictment was filed in federal court Thursday.

A San Fernando Valley business owner was arrested Thursday on federal charges for allegedly running a real estate investment scam in which several dozen investors lost more than $3.75 million.

David Williams, 52, a licensed securities dealer and investment adviser, is charged in a 10-count indictment filed in Los Angeles federal court with eight counts of wire fraud and two counts of tax evasion, according to the Internal Revenue Service.

The indictment alleges that Williams operated the scheme out of three Studio City-based companies -- WFG Holdings, Williams Financial Group and Sherwood Secured Investment Fund.

According to the indictment, Williams told a series of lies and failed to disclose information to those seeking to invest in a private placement offered to a small number of investors.

Specifically, Williams, and those working for him, told investors that Sherwood Fund would invest its assets primarily in real estate while investments in non-real estate assets would be limited to less than 10 percent, prosecutors allege.

Investors were also allegedly told that their funds would be secured by a lien on any investment property acquired.

In fact, Williams used more than 10 percent of the Sherwood funds for non-real estate related business, including $896,000 for business expenses, federal officials said.

Williams further used investors' funds to pay $569,000 to lease a home, $75,000 for clothing and jewelry, $69,000 for travel and $35,000 for his children's tuition, according to the IRS.

Between July 2007 and March 2008 Williams pocketed more than $3.75 million from about 60 investors as a result of the Sherwood offering, the indictment alleges.

unknownauthor December 21, 2012 at 06:55 PM
Another scam everyone should be aware of is the Amway Tool Scam. Google StopTheAmwayToolScam for more information, and forward this to every non-IBO you know, so they don't get scammed.


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