The Securities Exchange Commission Monday charged a Minneapolis attorney and two San Francisco promoters with fraud after they failed to disclose the financial collapse of a real estate lending fund to relevant investors. Todd Duckson, Michael Bozora and Timothy Redpath allegedly raised more than $21 million from investors in the Capital Solutions Monthly Income Fund after the sole business partner defaulted on financial obligations. The fund raised approximately $74 million from 450 investors between 2004 and August 2009. "The fund's real estate lending strategy failed due to the collapse of the fund's sole borrower. Instead of disclosing this fact, Bozora, Redpath, and Duckson falsely claimed that the fund was positioned to profit from the U.S. real estate downturn," said Robert J. Burson, senior associate regional director of the SEC's Chicago Regional Office. "Investors were entitled to know true facts rather than the misleading positive spin that Bozora, Redpath, and Duckson provided." The funds sole business was lending real estate investments to a single borrower, Hennessey Financial, who then distributed loans to borrowers. In 2007, the firm reported having "severe financial difficulty," according to the SEC complaint. In March 2008, Hennessey's borrowers defaulted and the firm foreclosed on them. In May 2008, the Capital Solutions fund defaulted. In late 2008, Bozora and Redpath asked Duckson to take over management of the fund. According to the SEC complaint, Duckson drafted a private placement memo for investors stating that Hennessey Financial's business strategy returned more than 21% annually, when in fact the firm had failed. The SEC is also charging True North Finance Corporation, a Minneapolis real estate lending company that merged with the fund in 2009, and its chief financial officer Owen Mark Williams with accounting fraud. He allegedly caused True North to overstate the fund's revenues by up to 99%. Write to Christine Ricciardi.