The Federal Bureau of Investigation (FBI) arrested Brandan Ross, the Founder and former CEO of Direct Lending Investments, a firm that managed more than $1 billion assets.
Direct Lending Investments provides loans to small businesses and retailers. The firm’s funds generate profits when the loans are performing. In other words, borrowers are paying their loans on time.
According to the U.S. Attorney’s Office for the Central District of California, Ross is facing federal charges for allegedly defrauding investors. He allegedly falsified financial records to inflate the value of the funds he managed under Direct Lending Investments.
Ross lied about the status of loans managed by Direct Lending Investments
A grand jury indictment alleged that Ross executed his fraudulent scheme between late 2023 and early 2019. The scheme allowed him to charge investors millions of dollars in unauthorized fees.
The indictment alleged that Ross concealed the fact that some of the loans were not performing by falsifying the firm’s monthly reports. He made it appear that borrowers were making payments. In fact, the payments that he recorded were actually fee rebates given by the company originating the loans.
