SEC Claims Fund Owner Blew Through Cash on Delray Beach Home, Beach Club
Brent Borland is accused of diverting money to pay for the mortgage on a waterfront home and a beach club membership in Delray Beach.
May 16, 2018 at 03:27 PM
3 minute read
The original version of this story was published on New York Law Journal
Federal prosecutors and securities regulators charged the owner of a New York investment fund engineered a $21 million investment fraud scheme that stashed cash in a Delray Beach house and beach club membership.
From 2014 to last March, Brent Borland allegedly raised $21.9 million from about 40 investors in his Belize Infrastructure Fund. The investors were told the money was going to build the Placencia International Airport in the Central American country. Prosecutors charged Borland promised high rates of return on the funds, which were fully secured by real estate in Belize that was free of any liens or obligations.
“In reality, some of the real property investors were told secured debt did not even exist; and Borland allegedly was using their money for personal expenses, such as luxury automobiles, a beach club membership and private school tuition for his children,” U.S. Attorney Geoffrey Berman of the Southern District of New York said Wednesday in a statement. “Cases such as this serve as a cautionary tale for investors — always carefully vet your investments — and if something seems too good to be true, it probably is.”
Borland is listed as a registered voter at 1034 Lewis Cove Road, which sits on the barrier island and backs up to a canal with access to the Intracoastal Waterway in Delray Beach. The Palm Beach County appraiser's office lists an appraised value of $2.56 million for the 6,434-square-foot house purchased by Borland's wife, Alana, in 2008 two years after it was built.
All of the investors ultimately lost money in the transaction, officials charged. One investor who sued Borland after purchasing a $1 million note in the fund received only approximately $400,000 as a result of the court action.
Another California investor who sued in the Southern District of Florida received a $338,892 default judgment in January to cover a personal guaranty on a $250,000 promissory note executed in 2006 by the Belize Infrastructure Fund.
Florida corporate records list nine companies in Borland's name.
In the criminal and civil complaints, the government alleged Borland diverted more than $7.5 million to his personal use. At least $1.75 million went to pay the mortgage on Borland's Florida home, $2.7 million covered his wife's credit card bills, and $36,000 went toward a Delray Beach club membership.
Another $25,000 went to pay for a Mercedes-Benz G 63 registered in Borland's name, while $31,000 of the funds were spent at Bloomingdale's and $10,000 was used at a store called Luxury of Watches. More than $183,000 was withdrawn as cash from Borland's account.
The U.S. Securities and Exchange Commission also announced charges against Borland in the matter. The SEC also listed Borland's wife and a corporation controlled by the couple as relief defendants.
Ellenoff Grossman & Schole partners Matthew Baum and David Gehn are representing Borland. Neither responded to a request for comment by deadline.
The U.S. attorney's office said Borland was arrested Wednesday and appeared before U.S. Magistrate Judge Barbara Moses of the Southern District of New York.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllFlorida Court's Reversal of Attorney Fees Triggered by Client's Death
4 minute readCOVID-19 Death Suit Against Nursing Home Sent to State Court, 11th Circuit Affirms
Florida Judge Threatened With Assault, Kidnapping and Death
Trending Stories
- 1Infant Formula Judge Sanctions Kirkland's Jim Hurst: 'Overtly Crossed the Lines'
- 2Abbott, Mead Johnson Win Defense Verdict Over Preemie Infant Formula
- 3Guarantees Are Back, Whether Law Firms Want to Talk About Them or Not
- 4Trump Files $10B Suit Against CBS in Amarillo Federal Court
- 5Preparing Your Law Firm for 2025: Smart Ways to Embrace AI & Other Technologies
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250