About 300 homes, the subject of an alleged Ponzi scheme, to be sold around Tampa Bay
About 300 homes are about to hit the inventory-starved Tampa Bay real estate market. That’s thanks to federal government efforts to recover money lost by hundreds of elderly investors in what it contends was a Ponzi scheme.
The accused fraudster is a company called EquiAlt, led by Tampa real estate investor Brian Davison.
Davison, with EquiAlt’s managing director Barry Rybicki, raised the money from more than 1,100 investors nationwide, and promised that “substantially all” of it would be used to buy distressed properties to yield “generous returns,” according to the civil action filed last year by the Securities and Exchange Commission.
Instead, returns were less than expected, according to the court documents, and EquiAlt “resorted to fraud.” Davison and Rybicki used new investor money to pay the returns of others, and “paid themselves millions ... and spent it on luxury automobiles, fine jewelry and chartering private jets,” the court documents read.
Howard Fischer and Gerald Davis, attorneys who represent Davison, said in a statement that lawyers from “some of the country’s largest and most respected law firms” helped design and consulted on EquiAlt’s business model. Adam Fels, a lawyer representing Rybicki, did not respond to an email requesting comment.
Now, the real estate buys made by EquiAlt’s investment funds, as well as the proceeds of the alleged scheme — including fine jewelry and a multi-million-dollar car — are being sold.
Burt Wiand, the court-appointed receiver in the case, said he’s planning to hold an auction within the next month starting with 30 properties. Depending on how that goes, more auctions could be coming or the rest of the properties, the majority of which are single-family homes, could be sold through other methods, he said.
Wiand said his job is to generate as much money as he can from the sales to distribute to creditors and victims, to “try to right the wrong of this fraud as much as possible.” According to a separate class action lawsuit filed by the investors against EquiAlt’s legal advisers, “a large percentage of the EquiAlt investors are elderly and many of them invested their life savings.”
Wiand noted the good timing.
“It appears from what I’ve observed and read that the housing market is a sellers’ market right at the moment, and I would like to take advantage of that,” he said.
Davison’s lawyers, in their statement, said that EquiAlt is being operated by the court-appointed receiver “using virtually the same EquiAlt staff.”
They also expressed skepticism about the auction.
“Unfortunately, a bulk sale of many of the remaining properties through an online auction limited to cash buyers might not bring the highest value for the EquiAlt properties, particularly in a white-hot real estate market like the Tampa Bay area,” they said. “Despite our concerns, we sincerely hope that the property sales will generate the maximum possible value for the benefit of investors.”
Wiand’s response?
“If I were to accept advice on how to liquidate these properties, it certainly wouldn’t be from Mr. Davison and his lawyers.”
As for the staff, Wiand said he kept on administrative personnel, whom he determined did not participate in the scheme.
Many of the roughly 300 properties are located in Hillsborough and Pinellas counties, with a smaller number in Hernando, Pasco, Polk and Orange, as well as a few in Tennessee, Wiand said. There’s also an entire mobile home park in Tampa and beach apartments in Treasure Island, though he did not provide identifying information about them.
There is a small number of luxury properties, like a five-bedroom, six-and-a-half-bathroom home on Davis Islands which recently sold for almost $4 million, according to the Multiple Listing Service. But most of the homes are modest and range in value from less than $100,000 to $400,000-plus, Wiand said.
The initial auction will feature houses, as well as a few condos and vacant lots, in St. Petersburg, Tampa, Clearwater, Tarpon Springs, Holiday, Seminole, Plant City, New Port Richey and more. Detailed information about each of the 30 properties can be found at www.equialtreceivership.com/assets-for-sale/.
While all of the homes in the first auction are vacant, “the largest portion of these properties are occupied by tenants,” Wiand said, many of whom are on month-to-month leases. The future of those tenancies will depend on the buyers and what they work out with the renters.
In addition to the homes are items straight out of luxury magazines: Wiand recently sold multiple Ferraris and a matte blue, carbon-fiber-body Pagani Huayra Roadster, an Italian car worth around $3 million, he said. Only four of that color and finish were ever made.
“It’s glorious,” Wiand said. “It’s not a car, it’s a work of art.”
There’s still a 1977 Ferrari that must be sold, in addition to about 70 watches by makers such as Switzerland’s Audemars Piguet and Rolex, which collectively are estimated to be worth around $15 million, he said. There’s also a Tampa “man cave” with a garage where the luxury cars were kept, as well as an attached cigar room and gym, Wiand said. Finally, there’s also EquiAlt’s former office building at 2112 W Kennedy Blvd. in Tampa.
The case filed by the Securities and Exchange Commission is pending, though a settlement agreement has been reached between Davison and the commission and is awaiting approval, according to Wiand.
Lance Williams, a Tampa Realtor, said since the roughly 300 homes are spread out throughout the region, their sale is unlikely to move the needle on a macro scale to help the inventory shortage. But the situation is highly unusual.
“For me, that’s a first,” he said. “That’s a lot of houses coming on the market at once.”
The auction format is geared toward cash buyers, but Wiand said if there are home-shoppers using mortgage financing who are interested, they should contact: Tony Kelly at tony@equialt.com, Alex Ellis at alex@equialt.com and Sam Wiand at samwiand@gmail.com.
