SEC Freezes Assets of Wells Real Estate Investment and Leaders Amid $56 Million Fraud Allegations
From the desk of Jim Eccleston at Eccleston Law
The Securities and Exchange Commission (SEC) has taken emergency action against Wells Real Estate Investment, LLC, its CEO Janalie C. Bingham, and Jean Joseph, a previously convicted felon, for allegedly defrauding investors out of $56 million. The SEC’s complaint claims that the defendants misled approximately 660 investors nationwide, many of whom invested their retirement savings, into their fraudulent scheme.
According to SEC.gov, the defendants falsely claimed that Wells managed a $450 million real estate portfolio focused on South Florida and that investor funds were solely used to purchase and improve properties. Starting in January 2020, the defendants allegedly used unregistered sales agents to promote Wells' "Assets-to-Income Program," which offered promissory notes supposedly backed by real estate and promised returns ranging from 12 percent to as high as 99 percent over three years.
In reality, the SEC alleges that only $11 million of investor funds were used to purchase properties, which were heavily mortgaged and failed to generate enough income to meet the promised returns. The complaint also accuses Bingham and Joseph of diverting $28 million of investor funds into speculative futures and options trading, resulting in $11.9 million in losses. The defendants allegedly paid $6.9 million in undisclosed commissions to sales agents and used about $10 million in a Ponzi-like scheme to pay interest and redemption requests from earlier investors. Furthermore, Bingham and Joseph are accused of personally misappropriating $1.8 million and transferring $1.95 million worth of Wells-financed properties to themselves.
Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.
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