Retirees in Colorado who were hoping to make lucrative real estate investments in their golden years ended up losing a fortune in an alleged fraud scheme perpetrated by an attorney and real estate guru, William Bronchick, The Denver Post reports.
The State of Colorado has filed a civil suit against the attorney and creator of the LegalWiz website that features podcasts, books and other tips on real estate investing. Bronchick was alleged to have violated the state’s Securities Act’s anti-fraud regulations by unlawfully securing $785,000 in investors’ retirement funds. Bronchick is accused of misleading investors by saying that his company, Valois Dynasty, owned apartment buildings that it had never fully acquired.
In addition, he failed to inform investors that their money was going to be used to pay hundreds of thousands of dollars unpaid bills at properties in which he held only a 24% interest. The self-styled real estate investment expert is accused of deliberately targeting retirees and urging them to use funds from their IRAs for the real estate deals. The eight investors lost their money when Bronchick dumped the properties when faced with foreclosure.
Bronchick who was the co-founder and former president of the Colorado Association of Real Estate Investors, denies the charges, and told The Denver Post, “Someone has a bug up their butt at the state commission. They’ve been poking at me for a couple of years. Everything was completely disclosed.” The securities commissioner, Gerald Rome, highlighted Bronchick’s promise to the eight investors that the deal would yield “amazing returns,” when in fact, the financial information that was omitted made it clear that the plan was destined for failure and that Bronchick’s intention was to leave the investors with the bill. Rome’s aim is to have the money returned to the disappointed retirees and to bar Bronchick from working in the securities industry.