SEC Obtains $15 Million Final Judgment Against Virginia Real Estate Developer
Litigation Release No. 25201 / September 10, 2021
Securities and Exchange Commission v. Todd Elliott Hitt et al., Civil Action No. 18-cv-01262 (E.D. Va. filed Oct. 5, 2018)
The Securities and Exchange Commission announced that it obtained a final judgment as to monetary relief against Todd Elliott Hitt, whom the SEC previously charged in connection with a scheme to defraud investors and misappropriate investment funds. The final judgment finds Hitt liable for more than $15 million in disgorgement and prejudgment interest.
According to the SEC's complaint, filed October 5, 2018, Hitt solicited investments through public offerings to finance the purchase of an office building at the WMATA Silver Line Metro Station in Northern Virginia and to finance the construction of a number of new homes in the area. However, according to the complaint, Hitt routinely commingled investor money and project returns among the various corporate and relief defendant entities, misappropriated investor funds to support his extravagant lifestyle, and made Ponzi-like payments to prior investors. The SEC further alleged Hitt also separately raised $2.5 million for one of the relief defendant entities that he managed, but then misappropriated approximately half of the monies invested.
Hitt previously agreed to a bifurcated settlement that left to the court the determination of any monetary remedies against him. Separately, Hitt - who acted as an investment adviser with respect to one of the investments - agreed to a permanent securities industry bar.
The court's final judgment finds Hitt liable for disgorgement and prejudgment interest of $15,001,498. In light of his conviction and sentence to a 78-month prison term in a parallel criminal case, the SEC dismissed its claim for a civil penalty, thereby concluding this matter in full.
The SEC's litigation was led by Patrick R. Costello and supervised by Frederick L. Block. Daniel Rubenstein, Michael Grimes and Shipra Wells, supervised by C. Joshua Felker, of the SEC's Enforcement Division assisted in the litigation. The SEC acknowledges the assistance of the Federal Bureau of Investigation and the U.S. Attorney's Office for the Eastern District of Virginia.
The SEC's Retail Strategy Task Force and Office of Investor Education and Advocacy (OIEA) encourage investors to check the background of anyone selling or offering them an investment using the free and simple search tool on Investor.gov.