SEC Files Suit Against Utah Man for Fraud Scheme

The ""Securities and Exchange Commission"":http://www.sec.gov/ (SEC) filed a civil injunctive action against Ivan Wade Brown and two of his companies - Highland Residential, LLC and Avanti Capital Partners, LLC - the agency announced in a release Tuesday.

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The SEC alleges in a ""complaint"":http://www.sec.gov/litigation/complaints/2012/comp22447.pdf that Brown solicited over 93 investors via mail, email, and phone and managed to raise over $27 million through the fraudulent and unregistered sale of promissory notes in Highland and Avanti.

Brown, who is a resident of Alpine, Utah, led investors into thinking that Highland and Avanti would use their funds funds to make secured bridge loans to people purchasing or building a residence under circumstances that he represented as being of little-to-no risk.

Instead, Brown spent a significant portion of the investor funds on other things, including personal use, to make Ponzi payments, to invest in properties other than the ones he had identified, and to invest in other suspected forms of fraud, including a mineral refiner and a movie production.

According to the release, Brown began the sale unregistered promissory notes for Highland in 2004, and in 2007, he formed Avanti following investigations from Utah Division of Securities concerning Highland.