SEC Obtains Final Judgement in $67 Million Mortgage and Ponzi Scheme
The U.S. Securities and Exchange Commission announced that the United States District Court for the Eastern District of Texas entered final judgments against Thurman P. Bryant III, Bryant United Capital Funding Inc., Arthur F. Wammel, and Wammel Group LLC.
The final judgments resolve all claims arising from the SEC’s complaint, filed in 2017 and amended in 2018. The initial complaint alleged that Bryant and Bryant United fraudulently raised $22.7 million from investors based on false promises of guaranteed investment returns in the mortgage industry, while the amended complaint added that Wammel and Wammel Group operated a related $44.7 million Ponzi scheme that defrauded Bryant’s investors and others.
The final judgments ordered the defendants to pay disgorgement with prejudgment interest and permanently enjoined them from future violations of the antifraud provisions of federal securities laws. Specifically, Bryant and Bryant United were ordered to pay, jointly and severally, disgorgement of approximately $4.29 million, plus prejudgment interest of $162,899.10. Wammel and Wammel Group were ordered to pay, jointly and severally, disgorgement of nearly $5.99 million plus prejudgment interest of $227,392.17.
The final judgments deemed these disgorgement and prejudgment amounts satisfied by the amount collected by a court-appointed receiver and distributions to investors, and by the restitution of approximately $9.1 million ordered against Bryant and Wammel in their individual criminal cases.
The SEC’s case stemmed from a related criminal case in the Eastern District of Texas, in which Bryant and Wammel were convicted of conspiracy to commit wire fraud. The case involved an investment scheme in which the defendants promised investors a guaranteed minimum 30% annual return on their investment. Bryant promised that the money would be placed in a secure escrow account, but actually, the funds were funneled to Wammel for securities trading and other purposes. According to trial evidence, both Bryant and Wammel then spent a large amount of the money on personal expenses such as home leases and improvements, car leases, expensive jewelry and private school tuition, while Wammel used the money for expenses related to a Rolls-Royce, a Ferrari and a Range Rover.
Wammel and Bryant were ordered to pay over $9 million in restitution to the victims. Bryant was sentenced to 240 months in federal prison, and Wammel was sentenced to 136 months. The two attempted to appeal the decision, but, in 2021, the court’s decision was upheld and the appeal was denied.
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