SEC Charges Estate of Kenneth J. Casey for Misappropriating Funds

Posted on June 3, 2021Comments Off on SEC Charges Estate of Kenneth J. Casey for Misappropriating Funds

SEC Charges Estate of Deceased Real Estate Company Founder with Misappropriating More Than $10 Million from Investors

WASHINGTON, DC (STL.News) The Securities and Exchange Commission (SEC) Wednesday charged the Estate of Kenneth J. Casey for defrauding investors out of millions of dollars in a Ponzi-like real estate scheme.

The SEC’s complaint, filed in the U.S. District Court for the Northern District of California, alleges that from June 2011 through May 2020, Kenneth J. Casey raised hundreds of millions of dollars by falsely telling investors in Marin, California-based real estate companies Professional Financial Investors, Inc. (PFI), Professional Investors Security Fund, Inc., and related entities that their money would be used primarily to invest in multi-unit residential and commercial real estate to be managed by PFI.  As the complaint alleges, however, Casey knew that a significant portion of investor funds was being used in a Ponzi-like fashion to pay existing investors.  The complaint further alleges that Casey directed PFI employees to falsify financial statements provided to investors to create the impression that their investments were safe and profitable.  According to the complaint, Casey also personally misappropriated more than $10 million of investor money, including to fund a large renovation at one of his personal residences and to pay his federal and state taxes.

The SEC’s complaint charges Casey with violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Section 17(a) of the Securities Act of 1933.

The SEC’s investigation, which is continuing, was conducted by Rebecca Lubens and Mike Foley with the assistance of Brent Smyth, under the supervision of Tracy L. Davis and Monique C. Winkler of the San Francisco Regional Office.  The SEC appreciates the assistance of the U.S. Attorney’s Office for the Northern District of California and the Federal Bureau of Investigation.

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Comments Off on SEC Charges Estate of Kenneth J. Casey for Misappropriating Funds