The Securities and Exchange Commission this week filed suit against Milon Lyle Brock, a San Diego, California fund manager, alleging that he bilked investors out of millions through a real estate Ponzi scheme.
The suit alleges that, while acting as chief executive of Emvest Mortgage Fund, Brock raised $18 million from 270 investors by telling them they were investing in a fund that bought and sold real estate mortgages. Instead, Brock allegedly used substantial amounts of new investors’ capital to pay returns to existing investors, according to the lawsuit.
According to the San Diego Tribune Story, Brock has had previous legal troubles. In 1994, the California Department of Corporations issued a desist-and-refrain order against Brock and one of his entities for offering unqualified limited partnerships. The next year, he lost his real estate license and filed for Chapter 7 bankruptcy. According to the San Diego County District Attorney’s Office, Brock was in trouble again in the late 1990s for cheating clients who came to him for hard money loans. In 1999 he was arrested, briefly jailed and charged with extortion, grand theft and filing a false document.
Distributions from the Emvest fund were frozen pursuant to court order. A hearing is scheduled for December 3, 2004 to determine whether a preliminary injunction to shut down the business should be issued