The Securities and Exchange Commission (SEC) filed securities fraud charges against Michael Shustek, a real estate CEO in Las Vegas, and his investment advisory firm, Vestin Mortgage LLC.
According to the SEC, Shustek owns several real estate investment trusts (REITs) in Las Vegas including the Vestin Realty Mortgage I (VRTA), Vestin Realty Mortgage II (VRTB), and The Parking REIT.
In the complaint, the Commission alleged that Shustek engaged in a variety of complex fraudulent schemes to enrich himself at the expense of investors in the REITs he operated.
He allegedly committed securities fraud using Vestin Mortgage. He funnelled $29 million from VRTA and VRTB into The Parking REIT. After that, he ordered VRTA and VRTB to enter into a series of money-losing transactions, in which the firms repeatedly resold the same six buildings for his personal gain and The Parking REIT.
Additionally, the SEC alleged that Shustek violated his fiduciary duties by deceiving the board of directors of VRTA and VRTB in two separate securities transactions to obtain almost $10 million from the firms.