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SEC accuses Texas mortgage lender of running massive Ponzi scheme

Frisco resident Thurman Bryant III raised $22.7 million from investors

A North Texas man who raised nearly $23 million from investors under the guise of investing in the mortgage business actually used some of the money for his own personal use, while funneling money to a supposed concert promoter who claims to represent Taylor Swift and Drake, the Securities and Exchange Commission said this week.

According to the SEC, Thurman Bryant III (Trey) and his company, Bryant United Capital Funding, raised approximately $22.7 million from approximately 100 investors across the country by falsely promising “risk-free, guaranteed” returns on investments of at least 30% annually based on investments Bryant would make in the mortgage industry.

Included in that $22.7 million is approximately $1.4 million that Bryant raised this year after finding out in December 2016 that he was under an SEC investigation.

Specifically, the SEC alleges that Bryant told investors that Bryant United Capital Funding would fund mortgages, which would then be immediately sold to third parties in exchange for a fixed fee.

According to the SEC, Bryant allegedly told those investors that their money wouldn’t be used to fund the mortgages or in the operation of the company. Rather, Bryant allegedly told the investors that their money would placed in a “safe escrow account” to serve as proof of funds to acquire a line of credit, which would be used to fund the mortgages.

The SEC further alleges that Bryan and his company sent monthly account statements to the investors purportedly showing that their initial investment were still safe in that supposed escrow account.

But, the SEC states that Bryant’s representations to investors were false.

Instead of using the money for investment in the mortgage industry or any other legitimate means, the SEC states that Bryant was allegedly running a Ponzi scheme, using the money for himself and others and paying investors with other investors’ money.

According to the SEC’s complaint, Bryant combined the investor funds into a single deposit account over which he had sole control and intentionally misappropriated $4.8 million to cover personal expenses, including the following monthly expenses:

  • $9,750 (and then $18,000 per month beginning in April of 2016) to rent a house in Frisco, Texas
  • $3,500 in lease payments for luxury and other vehicles
  • $1,800 for a housekeeper
  • $3,000 for meals and groceries
  • $3,400 for private school tuition
  • $1,000 for horse riding expenses
  • $1,200 for an apartment

Bryant also spent more than $250,000 to furnish and decorate his rented home, the SEC complaint states.

In addition to the $4.8 million Bryant allegedly kept for himself, he also allegedly funneled approximately $16.1 million to Houston, Texas-based Wammel Group for “high-risk” securities trading and investments in various businesses.

Then, after learning that he was under SEC investigation, Bryant then allegedly sent $1.37 million to supposed concert promoter Carlos Goodspeed d/b/a Top Agent Entertainment for “no apparent legitimate or lawful reason,” the SEC stated.

According to the SEC complaint, the funds were to be used to promote concerts by Taylor Swift and Drake.

But the SEC complaint states that Goodspeed is not what he claims to be.

From the SEC complaint (emphasis is HousingWire’s):

Bryant intentionally or at least recklessly put BUCF investor funds at risk by transferring them to Goodspeed, not only because doing so violated his express promises to investors about how their money would be used, but also because even a rudimentary review of Goodspeed's background online and in public records would have revealed relevant concerns about his track record and reputation. Goodspeed provided no services or consideration in exchange for these funds, and has no legitimate claim to monies which were misappropriated from unwitting investors who were promised a no-risk investment in the mortgage industry in which their principal would be protected against loss in secured escrow accounts.

The SEC complaint lists five separate civil or criminal issues that Goodspeed has been involved in over the last few years, including being found liable by default judgment for fraud and breach of contract in connection with a supposed promise to secure concerts by Drake and Ciara in 2011; as well as being found liable by default judgment for breach of contract in connection with an agreement to secure an event with Jay-Z.

Bryant also sent $140,000 to his father, who was Bryant’s first investor when he founded the company in 2011.

According to the SEC, to date, Bryant United has paid approximately $16.8 million to its investors in the form of purported investment returns and, for certain investors, significant referral fees for identifying new investors.

The SEC adds that the company “has never used investor monies as Bryant claimed it would, and monies paid out as referral fees and supposed profits on investments are, rather, misappropriated monies sourced from other investors, including Ponzi payments.”

The SEC charged Bryant and his company with various violations of the Securities Act of 1933 and the Securities Exchange Act of 1934. The SEC is seeking permanent injunctions, civil penalties, and disgorgement with prejudgment interest.

Additionally, a federal judge appointed a receiver over Bryant’s assets and entered a temporary restraining order, asset freeze, and other equitable relief.

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