Lewis Wallach, the former chief executive of Professional Financial Investors, Inc. (PFI) has been charged with operating a fraudulent Ponzi scheme and misappropriating investors’ funds.
PFI is a real estate investment and management company based in Marin, California.
The Securities and Exchange Commission (SEC) filed the lawsuit against Wallach in the U.S. District Court for the Northern District of California. The Commission accused him of violating the antifraud provisions of the federal securities laws.
In the lawsuit, the SEC alleged that Wallach and the now-deceased founder of PFI raised approximately $330 million from over 1,300 investors.
Wallach allegedly misappropriated more than $26 million from their investors, many are senior citizens, retired and relying on their investment income for daily living expenses.
Wallach, PFI founder lured investors by making false and misleading claims
Wallach and the company’s now-deceased founder allegedly made false and misleading statements to lure investors. They falsely told investors that they will invest their money in multi-unit residential and commercial real estate to be managed by PFI. In reality, they used a significant portion of investors’ funds in a Ponzi-like scheme to pay earlier investors.