See section in sidebar for a collection of all posts on Steadivest.
The Securities and Charities Division of the Mississippi Secretary of State's office issued a Summary Cease and Desist Order against Steadivest on November 18, 2009. Copy of order. Steadivest is currently in Chapter 7 bankruptcy. Several investors sued Steadivest and several officers alleging they engaged in a scheme to defraud investors for several million dollars.
Steadivest is a collection of companies engaged in several activities related to real estate: mortgage lending, buying and selling properties, new construction, renovations, managing real estate portfolios, and selling promissory notes allegedly secured by real property to investors.
The Steadivest Companies and their officers are:
Steadivest Development: Marshall Wolfe (member)
Steadivest Capital, LLC: Marshall Wolfe (member), Patrick McCraney (registered agent), Jack
Harrington (member)
Steadivest Contrarian Fund: Patrick McCraney (member), Kelly Simpkins (registered agent)
Steadivest Properties: Marshall Wolfe (member), Kelly Simpkins (registered agent)
Steadivest Lending: Marshall Wolfe (member), Kelly Simpkins (registered agent)
Steadivest Resources: Jack Harrington (member), Kelly Simpkins (registered agent)
The order states Steadivest is a "holding company that offers real estate investment, property management, and bridge loan lending". Unfortunately for Steadivest investors, the State also said Steadivest was an elaborate "ponzi scheme". Steadivest sold shares to investors, raising $1,585,000 and spelled out to them in a Private Placement Memorandum (PPM).
A Private Placement Memorandum is "A legal document used in the private placement industry that gives investors details about a company’s business plan, investment information, and other pertinent details. Private placements are offerings of stocks or bonds that institutions or accredited, wealthy individuals may participate in, but which the public at large is excluded from." (Webster's)
The State initiated an investigation on May 26, 2009 after several complaints were filed with the Securities Division. The State found several violations.
Steadivest guaranteed the "investment funds would be held in escrow.... However, Steadivest failed to hold these funds in escrow." The State ruled Steadivest's actions showed "it had no intent to comply with the escrow terms" promised to investors. Steadivest would instead deposit the funds into its checking account where it was "commingled with Steadivest's operating cash" and that Steadivest used the investors' money to "pay bills and support the daily operations of the corporation."
Steadivest promised to maintain an open set of books that members could examine upon giving reasonable notice to the company. Unfortunately for the investors, Steadivest "never produced a single audited financial (statement)" and investors were never able to see the books.
The State stated Steadivest's presentations to the investors were of a "fraudulent nature" and that the escrow accounts were kept empty as the investors money was used to "prop up" the company instead of the intended purpose for the funds. Steadivest also used funds to prematurely pay off promissory notes held by Jack Harrington, a member of Steadivest.
Steadivest represented to investors the company was purchasing homes for a low price, renovating them, and then flipping them for a profit. The State said the figures used to show how this could make a profit for the company were "engineered solely for the purpose of fraudulently enticing investors." and that there were no profits made on these homes.
The Securities Division ruled "Steadivest mislead and deceived its investors in order to pay off mounting debt and keep its numerous subsidiaries afloat. In a "Robbing Peter to Pay Paul" Ponzi scheme, Steadivest mislead investors through a PPM (private placement memorandum which told investors where money would be spent) which Steadivest had no intention of honoring; through material misstatements of its CEO, Marshall Wolfe, and through material omissions in sales presentations and materials presented to its investors."
The State ordered Steadivest to Cease and Desist immediately from "further illegal activity". If Steadivest violates the order, the State can fine it up to $25,000 and imprison company officers up to five years in jail. Steadivest can request a hearing if it so desires.
It is also important to note several members of Steadivest were disciplined by the State in 2005. Marshall Wolfe was fined $10,000 and the State suspended his securities license for six months for selling promissory notes on real estate deals for MTW, a company he later owned (It was initially owned by his wife, brother-in-law, and Joel Travelstead. Wolfe later became a part-owner.) behind his employer's back to his clients. His employer, Bancorp South, discovered his double dealing, fired him, and reported him to the State. The Cease & Desist Order stated he committed the same violations while working for his next employer, Trustmark. The State ruled he sold unregistered securities and fined MTW Investments, an additional $10,000, as Wolfe sold the unregistered securities for MTW. Copy of earlier Cease & Desist Order
One investor, Bobby Isonhood, filed suit in August in Madison County Circuit Court against Marshall Wolfe. He obtained a default judgment which was entered against Mr. Wolfe on October 28, 2009 for $1,184,604. It is also unknown as to whether Mr. Wolfe or the officers of the Steadivest companies are the subject of any further investigation by federal or state authorities.
Tuesday, November 24, 2009
State: Steadivest Operated a "Ponzi" Scheme, Issues Cease & Desist Order. Investor Obtains Million Dollar Judgment
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34 comments:
What a mess..always amazes me what people think they'll get away with. Hope to see Steadivest continue to get the appropriate actions against them.
And wonderful reporting, KF. Between this and Evans, santa should bring you lotsa goodies for all your hard work!
Wonder how Isonhood got his suit pushed through so quickly? Surely there were other investors who filed similar suits.
Default. Wolfe never showed up. Never contested anything or filed answers. Clerk told me complaint was filed, suit served, default awarded, then entered.
Marshall,
I enjoyed the piece WLBT ran this morning. They did not present you in the best light but I am sure you are prepared to spinn everything to your benefit, you are a survivor!
Lets take a look at what has taken place over the past year in your life.
Your credibility and integrity is in great question
You have lost the love and support from many good people in the community
You have lost your business
You have lost your home
You have lost your wife
You have law suits and restraining orders filed against you
You are believed to be a coward at the core of your being
So, how are things? Life good?
Guess Wolfe knew there was no need in paying attorneys to fight a losing battle? Plus he probably knoew he couldn't wouldn't pay any award anyway?
You left out being prosecuted for possible bankruptcy fraud and if fraud was committed on these transactions, then federal statues on mail fraud and wire fraud probably apply. If the state investigated this, probably a safe bet they notified the feds.
Wow, the Steadivest defenders sure are quiet. Not a peep out of them after everything they pulled on this website.
I don't think there are any left. I'm sure most ahve figured out now that they aren't getting their money back so no need in defending him anymore.
Well, Travelstead and Paris/Ivestlinc threw Wolfe under the bus. Wolfe's wife is divorcing him so no more defense from her crowd. Then McCraney threw Investlinc somewhat under the bus recently, saying Investlinc approached Steadivest. So there may be some truth to what you say.
If the State knew he was doing this since 1995, wonder why they allowed this to continue on for four more years without some type of strict oversight. Why wasn't he shut down then before he hurt more good folks? Sounds like wrist-slap enforcement. Pay us 10 grand and you can keep your license and go back to stealing.
It's a little concerning (although very entertaining and compelling to see the fraud exposed) to me, seeing Steadivest in the crosshairs now on the heels on the Evans blow up. I've done tons of title work on both of these deals (Steadivest for the bankruptcy and Evans to sort out the mess for most of the banks), and I haven't received a summons yet! WHEW!!! Better lay low! And by the way, KF, excellent reporting on Evans - as a person who knows all the intricacies of that spiderweb, I have to tip my hat to you, great job laying it out so others can understand it!
10:44 I know who you beez!
10:55 I'm just glad I get to watch from the sidelines at this point!
http://www.equitybuild.com/team
These folks appear to be doing the same thing.
1995? you mean 2005, right?
1. The State's power is somewhat limited.
2. Here is the timeline:
Wolfe gets busted by Bancorp South for selling promissory notes for MTW behind his employer's back. They reported him to state and fired him. Stated investigated and found he did it while working at Bancorp South and at his next job, Trustmark. They fined him Ten grand and took away his license for awhile.
AT THE TIME, MTW was owned by his wife, brother in law, and Joel Travelstead. The State fined MTW $10,000 for the same incident as it fined Wolfe. It stated JT was a major actor in the activity of MTW selling unregistered securities with Wolfe.
JT, Wolfe, and others formed Steadivest but travelstead got out of it in 2007 if I remember correctly. Keep in mind Eric Clark was SOS and the state was not too aggressive on Securities and Charities regulation. That is one reason some are screaming now is because suddenly the state is actually investigating and prosecuting. Are you paying attention Mr. Allison?
Someone has to file a complaint first with the state is my understanding and apparently someone did because the state then investigated Steadivest and hence, the order.
i'm suing 10:44 next week
Such a pity and a shame that honest, hard working, elderly, people got scammed like this. It is not much different than being robbed, just without a gun, but with lies and at Greed is a terrible thing. It seems that there is always someone who wants to get rich quick off of someone elses money.
KF, you say McRaney threw InvestLinc under the bust with the statement that they approached Wolfe. How would that hurt InvestLinc? Seems as though at the time, Wolfe was the golden child amongst local investors and was showing a return of 12% on money. Wouldn't that just be InvestLinc looking for a good place to park money? Or am I missing something?
11:34 Funny you found them, they were customers of MTW and SteadiVest. Borrowed money from each entity and shmoozed with Wolfe. Good find.
... Did I say I was familiar with all of this? What I meant to say was that I've never heard of any of these people before... The only reason I've ever been to a courthouse was to buy a tag...
Sincerely,
10:44
2:02 PM - Do you have more information on Equitybuild? If so, please forward to Kingfish.
kingfish1935@gmail.com.
Yes, I meant 2005- when you get my age a decade can disappear quick!
KF, no info. I just know they were customers of MTW/SV and that they bounced deals back and forth with Wolfe.
As far as I know thye are as legitimate as this caliber of investor can be. Never heard anything bad about them beyond the normal bad mouthing you hear about every investor in South Jackson.
Well, one thing I did notice is when I was looking up all of those deeds of trust at the Hinds County Courthouse, many of the properties owned by steadivest were flipped back and forth over the years between various companies and it seemed like it was the same ones popping up after awhile.
I started to wonder if there was a central registry of houses to be flipped in South Jackson and all of these guys were using it.
Guaranteed annual returns. Red Flag City.
EquityBuild Finance, LLC Formed
Submitted by Jerry Cohen on Mon, 05/25/2009 - 20:22
Earlier this month, EquityBuild took steps to overcome a shortage of bridge financing funds brought on by frequent changes in Federal Reserve policies. This lack has been a hindrance to fulfilling a large backlog of orders.
We formed EquityBuild Finance, LLC and registered a $10 Million private placement memorandum with the SEC offering accredited investors the opportunity to realize guaranteed annual returns of 10-12% interest depending on the size and term of the investment. Investors' dollars are secured by the assets of the company which are cash and real estate secured first position notes lent exclusively to very well qualified individuals and against property with a minimum equity position of 30%.
I wonder what will happen to Wolfe or if he wil skip the country.
"a minimum equity position of 30%" if you are an investor and can't buy and rehab and be at 50%-60% of appraised value, you don't need to be in the business.
Wolfe guarenteed his investors a minimum of 35% (he never loaned over 65% of appraised value) and we all see how that worked out.
Not even listed with SOS website either as a fund or a business.
Reg D filing at www.sec.gov. They haven't filed their Reg D through Mississippi.
The locals are Norman Parker and his wife Thea Parker. They are doing business here without registering.
Link? can't find it.
Found it
Some interesting stuff going on here KF with this EquityBuild. The Form D you linked was filed by Shaun Cohen who is EquityBuild CEO "Jerry" Cohen's 30-something Vice-President son though alternately Shaun is listed as EB's Treasurer elsewhere on the net.
With a little searching online you find that Shaun's net activities have a certain 'Peach' flavor if you think about it where, in that case, EB's reward will be the up front payment of the origination points.
Despite EB making themselves to look like some kind of national firm and team you can't help but notice that they are groping the internet to fund their finance arm, only have properties in Chicago and Jackson (hmmm!) and have resorted to hawking online the sale of a smallish ($55k) MS note w/ a 15.99% interest rate. Must be a great deal with investors clamoring to get in. ;-)
Shaun is also all over the Mortgage Grapevine (search on shaun@equitybuild.com) and don't miss checking in at his blog.
INVESTORS THAT WERE INVESTED WITH STEADIVEST SHOULD LOOK AT DAVE ALBERS AND BARB ALBERS THEY WERE CONSULTANTS AND HAVE MONEY UP IN KANSAS CITY,COMPANY EQUITYLINK ALSO OWNED BY WELLS FARGO FOOTHILLS OUT OF CALIFORNIA.GET YOUR MONEY BACK FROM THESE SCUMSUCKERS.THEY WERE FIRED AND WELLS FARGO TOOKOVER COMPANY.
Wow! 2013 -- and I'm receiving emails from Shaun Cohen @ EquityBuild Finance. Promises, promises . . . glad I decided to dig a lttle. Thanks for all this info. BBB gives EquityBuild Finance an A- rating, not because of complaints but because of the length of time in business. Very interesting.
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