By Kevin Deutsch
On Monday, the Securities and Exchange Commission filed fraud charges against a Coral Springs businessman for allegedly misusing millions of dollars in investor proceeds.
Larry B. Brodman, President of Property Income Investors LLC, 7301 Wiles Rd., used the local company and other businesses to raise more than $9 million from about 156 investors, all through unregistered securities offerings.
The scheme, SEC investigators allege, was simple: Brodman and his companies told investors their money would go toward purchasing multifamily properties in South Florida, which would then be renovated and rented to tenants. Instead, Brodman misappropriated about $1.1 million in investor funds for his own personal use from January 2016 through September 2020, according to SEC investigators.
Brodman and his companies also misused investor money by paying sales commissions worth about $1.2 million to unregistered sales agents, despite telling investors that commissions would only be paid to “licensed broker/dealers,” investigators said.
Investor funds were also used to pay a portion of purported profits to other investors, according to the SEC.
In addition to Brodman, the commission charged Anthony Nicolosi – Brodman’s top producing sales agent – with selling the unregistered securities. Nicolosi was not a registered broker, according to the government.
The SEC’s complaint charges Brodman and his companies with violating antifraud and registration provisions of federal securities laws and Nicolosi with violating registration provisions.
According to the government, the defendants have agreed to a settlement with prosecutors, barring them from repeating the violations charged in the SEC complaint.
Brodman and his companies also consented to pay monetary relief and the appointment of a receiver to take control of the properties they purchased with investor funds.
Neither Brodman nor Nicolosi of Lake Worth could immediately be reached for comment.
The website for Property Income Investors says it makes “crowdfunded real estate investments with consistent quality returns.”
“Investors enjoy the benefits of ongoing income payments as well as capital appreciation post-sale,” the website states.
“Property Income Investors is uniquely positioned in this industry in that we have excellent relationships with all aspects of Real Estate Owned markets from banks and lenders to brokers and realtors, auction houses – even with the cities and counties involved in the foreclosure processes.”
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- Kevin Deutsch is an award-winning crime journalist and author. A graduate of Florida International University, Kevin has worked on staff at The Miami Herald, New York Daily News, and The Palm Beach Post.