YARMOUTH — Levee Breaks Investment Group LLC, a Yarmouth-based investment firm that declared bankruptcy Oct. 21, 2021, has left 55 investors holding the bag. Initial claims totaled approximately $4.5 million according to the Trustee assigned to the case. The Times has been following the bankruptcy case as it makes its way through the court. This is what we know so far:

More: Yarmouth investment company files for bankruptcy, investors likely to lose money

History of the firm

Levee Breaks Investment Group LLC: Formed in 2015 by Brian Serpone to conduct business for members including residential and commercial construction, development, rehabilitation, management and sale of property, according to the Secretary of the Commonwealth's website.

Brian Serpone: Principal owner of The Music Room, a Yarmouth venue offering studio recording, food, drink, an art gallery and live music featuring local and nationally known musicians. It opened in Spring 2021.

Dennis Serpone, Brian’s uncle, who sold unregistered securities or promissory notes for Levee Breaks, but  was not registered with the Secretary of the Commonwealth’s office, according to a Securities Division administrative complaint. His registration had been terminated by the SEC in 1998.

Headley Grange Investments LLC, was established in 2017 by Brian Serpone, to conduct commercial and residential real estate development, acquisition, renovation and sale, according to state records.

Timeline:

2015: Levee Breaks is established and starts selling promissory notes for $10,000 each. The notes promised to return 10%, paid in monthly installments, with a one-year term.

2017: Headley Grange Investments LLC is established.

2018: Levee Breaks begins a profit-sharing program with some notes, which were sold in $20,000 increments. Investors could share in the profits of the sale of a property or share in the annual rental income from a property.

2019: The activities of Levee Breaks come to the attention of the state’s Securities Division when an investor files a complaint, according to Deb O’Malley, spokesperson for Secretary of the Commonwealth William Galvin’s office. The investigation found that Dennis Serpone and the Levee Breaks Investment Group LLC allegedly violated several Massachusetts General Laws.

May. 2020: Dennis and Brian Serpone agree to a consent order from the Securities Division in the Secretary of the Commonwealth's office. An offer of settlement is submitted, but never honored, according to state documents.

Week of Oct. 11-15, 2021: The Securities Division filed an administrative complaint against Dennis Serpone and Levee Breaks for alleged continued violations of Massachusetts general law. Those alleged violations included offering to sell unregistered securities while barred from transacting business in the state, employing an unregistered agent, and making false and misleading statements to the Enforcement Section during its investigation

Oct. 22, 2021: Levee Breaks files for Chapter 7 bankruptcy

Oct. 22, 2021:Headley Grange Investments files for bankruptcy.

About $4.5 million in claims are filed in the bankruptcy case, according to Trustee David Madoff. Fifty-five investors are affected.  

July 2022: Trustee David Madoff files a motion to hire a forensic accountant to examine Levee Breaks bank accounts to see if funds had been misappropriated.

Sept. 21, 2022. Madoff asks the court for permission to examine four Citizens Bank accounts that received $4,454,000 in transfers prior to the bankruptcy filing. Information is being sought on the identities of each owner, holder, beneficiary and signatory associated with the accounts according to court documents.

The bank records and information regarding those transfers made by Levee Breaks Investment Group could potentially constitute preferential and fraudulent transfers. If so, the estate could make attempts to recover those transfers.

Contact Denise Coffey at dcoffey@capecodonline.com.

This article originally appeared on Cape Cod Times: The rise and continuing fall of Levee Breaks Investment Group LLC