SEC Charges North Texas Brothers in $12 Million Real Estate Fraud Scheme
The U.S. Securities and Exchange Commission has filed fraud charges against brothers Saumil Thakkar and Poorvesh Thakkar, alleging they orchestrated a multiyear scheme that defrauded approximately 48 investors out of more than $12 million.
According to the complaint in the U.S. District Court for the Eastern District of Texas, the brothers used their real estate investment fund, Pasmaa GP Investment Fund, LLC, and its related entities to mislead investors between 2017 and 2020.
A related filing states that the fund launched in March 2018 and sought to raise $20 million. It states that the first sale was made on Dec. 1, 2017, and the minimum investment accepted from investors was $50,000.
The SEC alleges the Thakkar brothers, through their companies PASMAA GP Investment Fund Manager LLC and Perfect Group Holdings LLC, or PGH, made several material misrepresentations to lure investors, many of whom were clients of the brothers’ North Texas tax preparation business.
Key allegations include fictitious documents and inflated leasing figures. The defendants claimed a major Dallas commercial building, Park Plaza Tower, was under contract for purchase by the fund. In reality, the building’s owner had already rejected their offer.
Further, marketing materials purportedly showed that development projects such as “Mustang Square” and “Alma” were heavily pre-leased, when in fact no such leases existed. Saumil Thakkar allegedly provided investors with land acquisition costs for Mustang Square that were understated by more than $1 million.
The brothers also claimed the Thakkar family was investing between $3 million and $3.5 million of their own money into the fund; the actual investment was less than half that amount, according to the complaint.
The complaint further details how the brothers allegedly siphoned investor funds through undisclosed related-party agreements. The SEC claims that while the fund’s offering documents stated no management fees would be charged, the brothers secretly funneled at least $2.2 million in fees to their own affiliate companies, including Thakkar Development Group and Drawstring Realty Management.
Investors reportedly complained about these undisclosed fees during a 2019 conference call, but the brothers allegedly continued the payments even after investors rejected a proposed amendment to authorize them.
The SEC’s action marks a repeat encounter with regulators for Poorvesh Thakkar, who previously paid a $16,000 penalty in 2016 for his role in an audit-related fraud involving his father’s accounting firm.
In this case, the SEC is seeking permanent injunctions to prevent the defendants from further violating federal securities laws, disgorgement of ill-gotten gains plus prejudgment interest, civil penalties against Saumil Thakkar and the manager entity, and an order barring the brothers from participating in the issuance or sale of any securities in the future.
The case remains pending in the Plano Division of the Eastern District of Texas.
Click here to visit the AltsWire directory page.
