SEC Charges Atlanta Businessman for Defrauding Senior Living Facilities

The U.S. Securities and Exchange Commission (SEC) announced fraud charges and an emergency asset freeze obtained against an Atlanta-based businessman. He stands accused of misusing investor funds raised to purchase and renovate senior living facilities.

In the complaint, the SEC alleges that Christopher F. Brogdon amassed roughly $190 million through dozens of municipal bond and private placement offerings in which investors supposedly earn interest from revenues generated by the nursing home, assisted living facility, or other retirement community project supported by their investment.

However, according to the complaint, Brogdon secretly commingled investor funds instead of using the money to finance the project described to investors in the disclosure documents for each offering. From these commingled accounts, he allegedly diverted investor money to other business ventures, as well as personal expenses.

According to the SEC’s complaint filed in federal court in Newark, New Jersey, Brogdon has been making payments to investors by borrowing money from third parties, using proceeds from other offerings, and drawing down on personal lines of credit, all of which are improper sources under the offering disclosures made to investors.

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The SEC complaint charges Brogdon with violations of the antifraud provisions of the securities laws and related SEC rules, and seeks the return of ill-gotten gains with interest and penalties. The complaint also seeks permanent injunctions against further violations of the securities laws, and a bar prohibiting Brogdon from serving as an officer or director of a public company. The complaint also names Brogdon’s wife and son and a number of his other business entities as relief defendants for the purpose of recovering ill-gotten gains plus interest for investors.

Sanjay Wadhwa, Senior Associate Director of the SEC’s New York Regional Office, commented:

As alleged, Brogdon deceived investors about the true nature of these investment opportunities. Brogdon falsely promised investors they were investing in specific senior living projects when in reality they also were funding his personal expenses and other businesses, including some that are struggling financially.