Real Estate Fund Executives Sentenced For Fraud
The CEO of a Grapevine-based lender that operates real estate investment trusts as well as three other executives — two of whom are based in Highland Park – were sentenced to a combined 20 years in prison for fraud, U.S. Attorney for the Northern District of Texas Chad E. Meacham announced Monday.
A federal jury in January convicted UDF CEO Hollis Morrison Greenlaw, UDF Partnership President Benjamin Lee Wissink, UDF CFO Cara Delin Obert, and UDF Asset Management Director Jeffrey Brandon Jester of 10 counts, including conspiracy to commit wire fraud affecting a financial institution, conspiracy to commit securities fraud, and securities fraud. According to records from Dallas Central Appraisal District, Obert and Wissink live in Highland Park.
(READ: Real Estate Fund Officials Found Guilty of Fraud)
Greenlaw was sentenced to seven years in prison; Wissink to five years; Obert to five years; and Jester to three years, authorities said. U.S. District Judge Reed C. O’Connor also ordered Greenlaw, Wissink, and Obert to pay fines of $50,000 each.
“UDF executives comingled funds, shuffling money from one fund to another without disclosing their actions to investors or regulators,” U.S. Attorney Chad Meacham said following the verdict. “The Northern District of Texas has always been tenacious in its pursuit of white collar criminals and this case is no exception. We were proud to bring these defendants before a jury and are pleased that the judge saw fit to sentence them to a lengthy prison term.”
UDF, founded in 2003 and headquartered in Grapevine, UDF utilized a family of five funds – UDF I, II, III, IV, and V – to invest in various residential real estate developers and private homebuilders, court records show.
According to court documents, when developers didn’t repay the money they borrowed from one fund, the defendants would transfer money out of another fund to cover the multi-million dollar shortfall and pay distributions to the original fund’s investors — without disclosing the transfers to the Securities and Exchange Commission and the public as required by law.
