Douglas Vaughan Real Estate Ponzi Scheme Busted by SEC


March 24, 2010 – Douglas Vaughan allegedly ran his entities The Vaughan Company, Realtor’s Inc., and Vaughan Capital, LLC as an investment scam that robbed approximately 600 investors of $80 million. On Tuesday, the Securities and Exchange Commission (“SEC”) filed a complaint in a New Mexico federal court against Vaughan and his entities alleging fraud.

Apparently, Vaughan lured investors by offering promissory notes with interest rates between 10 and 25 percent over one to three years. Vaughan allegedly claimed that the notes were secured by various real estate properties and his personal assets. The SEC claims that in reality, Vaughan used client funds to make Ponzi payments to other investors and pilfered funds for personal use. The complaint further alleges that Vaughan transferred almost all of the money raised through Vaughan Capital, LLC to The Vaughan Company.

According to the SEC, the outstanding value of the notes held by investors was 20 times more than the equity of the real estate that was allegedly backing them. Also, Vaughan’s personal worth is apparently negative in value.

The SEC has charged Vaughan and his entities with various securities violations and continues to investigate the matter.

Source: SEC

If you invested with The Vaughan Company, Realtors, Inc., Vaughan Capital, LLC and/or Douglas Vaughan, or are the victim of some other type of investment fraud, the Law Offices of the attorney, and its affiliates, is prepared to review your situation and potential claim(s) without charge, and will consider representing you on a contingent fee basis, which means that you will not have to pay out of pocket for your legal representation. The firm will take a fee only if we are successful in recovering your assets.

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