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Lending / The Ticker

SEC charges jailed broker with fraud in real estate scam

handcuffs

The Securities and Exchange Commission has filed fraud charges against Robert Vitale, who allegedly defrauded investors in a Florida real estate venture.

The SEC’s complaint alleges that Vitale and his firm Realty Acquisitions and Trust, Inc. raised at least $8.7 million from investors, many of whom were senior citizens. Vitale is also accused of selling unregistered securities and acting as an unregistered broker-dealer.

Vitale allegedly told his investors that their funds were “100% protected” when they were not, and he claimed to be a financial expert with a business degree from Notre Dame. In fact, he never attended college after graduating from Notre Dame High School in West Haven, Conn.

The SEC alleges that although Vitale told investors his success rested on his “great honesty and integrity,” he neglected to mention that he was charged by the SEC in 2004 for participating in a pump-and-dump market manipulation scheme or that he later settled the charges and was barred from the brokerage industry as part of the settlement.

Vitale is already serving a two-year prison sentence for lying to SEC investigators. He is currently an inmate at the Federal Detention Center in Miami. He was sentenced in September 2013 after being convicted of obstruction of justice and providing false testimony in the SEC’s investigation that led to these new charges.

“We are gratified that the criminal authorities held Mr. Vitale responsible for his attempts to derail our investigation,” said Andrew J. Ceresney, director of the SEC’s Division of Enforcement. “His prison sentence and our determination to uncover and charge his underlying misconduct notwithstanding his obstruction show how seriously we and our law enforcement partners take our missions.”

The SEC is seeking the return of the funds Vitale fraudulently raised with interest, plus a monetary penalty and a permanent injunction against Vitale. The SEC’s complaint also charges Coral Springs Investment Group Inc. as a relief defendant, alleging that the company holds assets that came from the defrauded investors that should be returned to them.

“Vitale hid the truth from investors just as he tried to hide his assets during our investigation,” said Stephen L. Cohen, associate director of the SEC’s Division of Enforcement. “When individuals barred from the industry continue their wrongdoing, we pursue them aggressively and seek to return their ill-gotten gains to investors.”

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