The Securities and Exchange Commission has charged the founder and managing principal of Activated Capital LLC with defrauding at least 14 investors in a purported opportunity zone fund scam.
According to the SEC's order, Joshua Burrell defrauded at least 14 investors who invested at least $6.3 million in Activated private real estate funds.
Approximately $6.1 million of the amount was invested by 12 investors in the Activated Capital Opportunity Zone Fund II LLC.
In approximately January 2019, Burrell and Activated Capital began marketing investments in the funds to investors and "made a number of material misrepresentations concerning the funds and specifically Fund II," the order states.
The funds purport to invest in "opportunity zones," a community development program established by the 2017 tax overhaul.
Fund II's operating agreement stated that it would purchase properties in the name of the funds for investment purposes, the order states. "Instead, however, in many instances, Burrell, through Activated, misappropriated investor funds by purchasing the properties in the names of other Activated entities that Fund II did not own."
Second, marketing materials and operating documents contained material misrepresentations concerning the funds' payment of distributions to investors.
