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Financial Fraud Alert - July 24, 2012 |
September 18, 2012
Previously published on July 24, 2012
This complaint stems from a “Ponzi-like scheme” allegedly perpetrated by Mark Feathers and three entities he controls: Small Business Capital Corp. (“SB Capital”), and two mortgage investment funds managed by SB Capital and Feathers, Investors Prime Fund, LLC (“IPF”) and SBC Portfolio Fund, LLC (“SPF”) (IPF and SPF are collectively referred to in the complaint as the “Funds”). According to the complaint, the defendants “represented to prospective investors that the Funds would pay ‘Member Returns’ of at least 7.5% from profits generated by the Funds’ mortgage loan portfolios.” However, the complaint alleges that “[c]ontrary to those representations, since at least 2010 for IPF and since 2011 for SPF, Feathers and SB Capital have paid returns to investors in excess of net profits of the Funds, in a Ponzi-like scheme in which the returns were partially funded with money from new investors.”
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