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U.S. Securities and Exchange Commission

Litigation Release No. 23738 / February 2, 2017

Securities and Exchange Commission v. Paul A. Garcia, et al., Case No. 8:17-cv-00174 (C.D. Calif. filed Feb. 1, 2017)

SEC Charges California Man in Fraudulent Real Estate Investment Scheme

The Securities and Exchange Commission today charged a Southern California man with defrauding investors and misappropriating more than $1.3 million from a real estate investment fund he controlled, Caliber Partnership I, LLC.

The SEC alleges that Paul A. Garcia of Newport Beach, Calif., raised $675,000 from thirteen investors in 2014 and 2015 by claiming that Caliber would use their money to purchase an unfinished golf resort and then join a large real estate venture that was poised to go public. But as investor money came in, Garcia caused Caliber to borrow heavily to finance two real estate purchases and misappropriated more than $1.3 million of the borrowed funds and investor funds through separate companies he controlled.

The SEC further alleges that Richard T. Woods of Southlake, Texas, negligently misrepresented Caliber's prospects in marketing materials that he authored and Garcia approved and used to attract investors. According to the SEC's complaint, filed in U.S. District Court for the Central District of California, the victims of the fraud included an eighty-two-year-old who lost $250,000.

To settle the charges, Garcia, Caliber, and the other companies involved in the fraud agreed to pay a total of more than $3.3 million in penalties and disgorgement of ill-gotten gains plus interest. Garcia also agreed to a court order prohibiting him from participating in securities offerings and from serving as an officer or director of a public company. Woods agreed to be enjoined from future violations and to pay a penalty and disgorgement totaling approximately $30,000. All settling parties agreed to the sanctions without admitting or denying the allegations in the complaint.

The complaint charges violations of Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act"), Rule 10b-5 thereunder, and Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 ("Securities Act") against Garcia, Caliber, and Caliber Capital Management, LLC. It also charges Partner Medical Solutions, LLC with aiding and abetting violations of Section 10(b) of the Exchange Act and Rules 10b-5(a) and (c) thereunder and violations of Sections 17(a)(1) and (3) of the Securities Act. Woods is charged with violating Section 17(a)(2) of the Securities Act. Acer Capital Group, Inc. and Greeneone.com, Inc. are named as relief defendants.

The investigation was conducted by Thomas Eme and supervised by Steven Buchholz of the SEC's San Francisco office.

SEC Complaint

 

https://www.sec.gov/litigation/litreleases/2017/lr23738.htm


Modified: 02/02/2017