U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23838 / May 22, 2017
Securities and Exchange Commission v. Thurman P. Bryant, III, et al., No. 4:17-cv-00336-ALM (E.D. Tex.)
SEC Halts Fraudulent Mortgage Investment Scheme
On May 15, 2017, the Securities and Exchange Commission filed an emergency action to stop a fraudulent mortgage investment scheme that raised approximately $22.7 million from approximately 100 investors.
The SEC’s complaint, filed under seal in federal court in Sherman, Texas on May 15, 2017 and unsealed on May 19, 2017, alleges that Frisco, Texas resident Thurman P. Bryant, III and his company, Bryant United Capital Funding, Inc. (BUCF), have raised approximately $22.7 million from approximately 100 investors across the country, approximately $1.4 million of which Bryant has raised just since January 2017. Bryant falsely promised these investors a risk-free, guaranteed minimum 30% annual returns on investments Bryant claimed he would make in the mortgage industry. Specifically, he allegedly told investors that BUCF would fund mortgages, and that those mortgages would be immediately sold to third parties in exchange for a fixed fee. He also allegedly told investors that their funds would be placed in a safe escrow account to serve solely as proof of funds to secure a line of credit from which BUCF would fund the mortgage loans. In addition, Bryant and BUCF allegedly sent investors monthly account statements purportedly showing that their initial investment monies were still safe in an escrow account.
The SEC alleges, however, that Bryant’s representations were false. The complaint alleges, for instance, that contrary to what he told investors, Bryant commingled investor funds in a single deposit account and intentionally misappropriated $4.8 million to cover personal expenses, including rent and luxury car payments, a housekeeper, meals and groceries, private school tuition, horse riding expenses, and for an apartment; funneled approximately $16.1 million to Houston, Texas-based relief defendants Arthur F. Wammel and Wammel Group for high-risk securities trading and investments in various businesses; sent $1.37 million to supposed concert promoter Carlos D. Goodspeed d/b/a Top Agent Entertainment for no apparent legitimate or lawful reason; sent $140,000 to Thurman P. Bryant, Jr. as purported but unearned investment returns; and made Ponzi payments to investors. The SEC also alleges that the monthly account statements defendants distributed were false, misleading, and served to further their fraudulent scheme.
The SEC’s complaint charges Bryant and BUCF with violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC seeks permanent injunctions, civil penalties, and disgorgement with prejudgment interest.
At the SEC’s request, U.S. District Judge Amos L. Mazzant of the Eastern District of Texas appointed a receiver over the defendants’ assets and entered a temporary restraining order, asset freeze, and other equitable relief.
The SEC’s investigation was conducted by Jason Reinsch and Carol Stumbaugh of the SEC’s Fort Worth Regional Office. Barbara Gunn supervised the case. Jessica Magee and Mr. Reinsch will lead the litigation.
https://www.sec.gov/litigation/litreleases/2017/lr23838.htm