Texas Real Estate Developer Faces SEC Charges Over Alleged Multimillion-Dollar Ponzi Scam

Originally published by P. Clarkson Collins Jr..

The US Securities and Exchange Commission has filed fraud charges against Phillip Michael Carter, Bobby Eugene Guess, Richard Tilford, and several entities accusing them of operating a multi-million dollar offering fraud. The regulator contends that the three men raised nearly $45 million from more than 270 investors in the US through the sale of high-yield, short-term promissory notes that were touted to prospective buyers as low-risk.

According to the SEC, investors thought they were getting involved in actual real estate development companies but instead ended up buying securities from entities with no assets. Carter, who is the principal of North Forty Development LLC and Texas Cash Cow Investments, is accused of then misappropriating $1.2M in investor funds for his own expenses, including a personal IRS tax lien and to operate a luxury hunting ranch. He also allegedly made over $3M in Ponzi payments that were issued to investors.

Now, the defendants are accused of offering and selling unregistered securities, violating the Exchange Act and the Securities Act, and acting as unlicensed brokers. The entities that are relief defendants in the case include:

• Frisco Wade Crossing Development Partners, LLC
• Crescent Park Development Partners, LLC
• McKinney Executives Suits at Crescent Parc Development
• Double Droptine Ranch, LLC

Last year, Carter was indicted on criminal securities fraud charges in Texas. The SEC reports that he owes investors over $45 million.

Meantime, Guess, who founded Texas First Financial Inc., is serving 12 years in state prison. He pleaded guilty to securities fraud last year for selling millions of dollars in what the Texas State Securities Board described as a “worthless Internet company.” Guess and associates sold stock certificates, notes, and investment contracts in Internet advertising company Stamedia. He sold securities in Texas for years even though he was barred from doing so in the state.

Tilford was also indicted at the same time as Carter over the allegedly fraudulent real estate investments sold mainly as promissory notes. The Texas State Securities Board said that he raised $6M from investors.

Texas Investor Fraud Lawyers
Our Texas securities attorneys at Shepherd Smith Edwards and Kantas, LLP (SSEK Law Firm) represents investors throughout the state. We work with investors in arbitration and litigation to recoup losses they sustained due to fraud or negligence. Our promissory note fraud lawyers offer free initial case consultations. Allow us to help you explore your legal options.

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