Ross caused Direct Lending Investments to overstate the value of the loans. He fraudulently inflated the monthly value of the funds’ assets by more than $300 million over a period of four years.
In addition, Ross allegedly arranged the sale of approximately $55 million of the loans to a third-party buyer in the summer of 2017. He allegedly helped conceal the deal, inflated the value of these loans, and falsely told the buyer that borrowers were making payments.
Ross resigned as CEO of Direct Lending Investment in March but he is still the owner of the firm. Soon after his resignation, the Securities and Exchange Commission (SEC) filed a civil complaint against his firm and a court-order receiver was appointed in early 2019.
On Monday, in conjunction with the unsealing of the criminal case against Ross, the SEV also filed a civil complaint against him for allegedly defrauding investors.
In the criminal complaint, the Justice Department charged Ross with 10 counts of wire fraud. Each count carries a statutory maximum sentence of 20 years in federal prison.
