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The Securities and Exchange Commission obtained a court order authorizing that more than $63 million be returned to investors who had been the victims of an alleged real estate investment scam run by New York real estate developer Robert C. Morgan and his Morgan Mezzanine Fund Manager and Morgan Acquisitions entities, the SEC said Thursday.
The amount represented the full return of funds to those who had invested in the fraudulent scheme, the SEC noted. The defendants didn't immediately respond to a request for comment.
The SEC had filed a complaint against Morgan and his firms May 22, 2019, in U.S. District Court for the Western District of New York, claiming the defendants engaged in a fraudulent real estate investment scheme. As alleged, Morgan financed his real estate development projects via, among other ways, the sales of securities to more than 200 retail investors, many of whom invested through their retirement accounts, the SEC said.
Morgan told investors their money would be used to improve multifamily properties, according to the SEC. Instead, Morgan and his entities diverted investor funds to facilitate payments to earlier investors and made misrepresentations to later investors about prior fund performance, the SEC said.
