Investor Fraud, Commercial Litigation and “Innocent Lies”

//Investor Fraud, Commercial Litigation and “Innocent Lies”

Investor Fraud, Commercial Litigation and “Innocent Lies”
There’s nothing new about people lying about their education and experience. And some people love to name drop, or even lie about who they know. In the midst of all this truth stretching, have we started ignoring the signals of liars and fraudsters? In the case of Frisco real estate developer, Phillip Michael Carter, his “regular” lies were only the beginning of defrauding 100 Texas investors out of $17.5 million. Carter was recently arrested and immediately released on bond.

Carter’s “regular” lies included claims such as:

  • He earned a chemical engineering degree from University of Virginia.
  • He had previously worked as a project engineer for Texas Instruments.
  • He worked with Robert Kiyosaki, author of Rich Dad, Poor Dad.

The lies through omissions that Carter and “friends” told were a little more concerning. According to the Texas State Securities Board, Carter never told investors or potential investors the following:

  • Carter and sales manager, Bobby Eugene Guess, both received target letters in 2016 from the U.S. Attorney’s Office that they were under investigation for mail fraud, money laundering and securities fraud. They continued to raise millions of dollars.
  • Guess and Texas First Financial were ordered to cease and desist illegal sales of the North Forty Investment Program operations in 2016 by the Texas Securities Commissioner.

Thick as Thieves.

  • In July 2018 Carter’s sales manager, Bobby Eugene Guess, pled guilty to fraudulent investment sales through Texas First Financial, and was sentenced to 12 years in state prison.
  • Former pastor, Timothy Booth of Plano, was convicted of stealing $23 million from investors that Guess recruited.
  • Richard Gregory Tilford sold investments in Texas Cash Cow and North Forty Investments, even after the target letters. Apparently, Tilford was no stranger to crime. Back in 2012 Tilford plead guilty to a felony involving failure to file a tax return, receiving a 12 month prison sentence.
  • Shelly Noel Carter was also indicted in 2018 for felony fraud. See Shelly Carter Indictment.

How can an investor steer clear of fraudulent investments? Sometimes a little research goes a long way.

  • License to sell or advise. Neither Carter nor Guess were registered as a dealer or agent with the Texas State Securities Office. Nor were they registered as an investment advisor with the Texas Securities Commissioner. In most cases people offering investment opportunities are required to be registered under the law. See Tilford Indictment.
  • Offers when risk doesn’t match reward. Texas First Financial investments were being advertised as no risk or little risk, but with a 9 to 12 % rate of return. See Cease and Desist Order.
  • Background checks. For investors working with Richard Tilford, a background check would have revealed his prior felony conviction. Also, cease and desist orders are a matter of public record. Investors from 2016 forward, might have been able to avoid fraud by a quick public record search.

When it comes to investments and commercial transactions, don’t let your guard down. Whether you are investing in a new business, embarking on a complex business transaction, or investing in real estate, we hope you earn great rewards. And, if you find yourself in need of commercial lawyer or a breach of contract attorney, we are ready to put our decades of winning experience to work for you.

Mark Alexander
5080 Spectrum, Suite 850E
Addison, Texas 75001
Ph: 972.364.9700
Fax: 972.421.1500

E-Mail: mark@markalexanderlaw.com
www.commerciallitigationtexas.com
www.oilandgasfraudlawyer.com

By | 2018-12-05T02:58:14+00:00 December 4th, 2018|Blog|0 Comments

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