Federal regulators are suing Charles C. Slowey, Jr. and the companies he controls – Endeavor Partners, LLC and Endeavor Capital Management Group, LLC – along with Advanced Planning Securities (APS), Oldham Harris and brokers Edward Puttick, Gregory Oldham and Glenn Harris for allegedly swindling retirees and senior citizens out of nearly $12 million. The Securities and Exchange Commission’s complaint, filed Oct. 22, alleges that the individuals gained investors’ trust via free lunch seminars and then convinced them to invest in four questionable real estate securities known as the Endeavor Funds.
According to the SEC’s complaint, investors have lost most of the money they invested in the funds as a result of “false statements and omissions made by Slowey, misappropriation of investor funds by Slowey, large fees and commissions paid to Slowey, Advanced Planning Securities, Oldham Harris, and the failure of the highly risky investments made by the Endeavor Funds.”
The SEC also alleges that Advanced Planning Securities failed to conduct sufficient due diligence into the private placement securities its agents were selling and looked the other way regarding numerous red flags concerning Slowey and the Endeavor funds.
Information in the SEC’s complaint alleges that investors were promised a return of more than 50% on the sale of some properties in which they were investing. In addition, the SEC accuses Slowey of misappropriating more than $1 million of investor funds by charging excessive management fees and taking out an interest-free personal loan to purchase his own home.
Many of the investors to whom the investments were sold had limited financial means, according to the SEC, and few had previously invested in private placement securities or securities based on distressed or subprime mortgages.
When the funds began to experience obvious financial problems, the SEC alleges that Slowey continued to make false statements to investors. For example, the SEC says he specifically told one senior investor in Florida that his investment was safe, when in fact the funds had little money left at that time. Slowey told another senior investor that the funds would recover by the following year, even though he had no basis for making the prediction.
On other occasions, the SEC says Slowey asked investors to reinvest their maturing interest in the Endeavor Funds even though he knew that the funds had lost substantial sums of money and owned only a handful of properties that were worth far less than the $10 million initially deposited by investors.
The SEC’s complaint can be viewed here.
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