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Leader of $50 Million Ponzi Scheme Arrested
Posted on May 12, 2011
John Bravata, accused of taking $50 million from nearly 500 investors in a Michigan-based Ponzi scheme, was arrested this week in New York for wire fraud.
Bravata, 43, is the founder of Detroit-based BBC Equalities LLC. He allegedly took $50 million from investors from 2006-2009 for real estate investments. However, he invested only about $20 million of this money, and allegedly used the rest for personal spending money.
The SEC states that Bravata spent investors' money to build his 18,000-square-foot home. He is also said to have spent investors’ money on cars, boats, jewelry, cosmetic surgery, international hunting trips, and artwork, even though BBC Equalities was not profitable.
"Bravata and those working on his behalf made multiple misrepresentations to numerous prospective investors, including misrepresentations regarding how their investment funds would be utilized, the security of funds invested with BBC, and the returns that could be expected by investors of BBC," federal authorities said.
Now, Bravata faces the consequences of his actions. He was arrested at John F. Kennedy airport on Friday and will be taken in handcuffs to Michigan to face the charges. The maximum penalty for wire fraud is 20 years a $250,000 fine.
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