The Securities and Exchange Commission (SEC) filed a civil enforcement action in The United States District Court for the Middle District of Florida against defendants: Equialt, LLC (Equialt); Equialt Fund, LLC (Fund 1); Equialt Fund II, LLC (Fund 2); Equialt Fund III, LLC (Fund 3); EA Sip, LLC (EA); Brian Davison (Davison) and Barry Rybicki (Rybicki) (collectively, defendants). The defendants are charged with running a real estate Ponzi scheme that raised over $170 million from over 1,100 investors and misappropriating millions of dollars for their own personal gain, buying luxury cars, fine jewelry, chartering private jets and other lavish expenditures. The complaint also lists seventeen relief defendants that received proceeds of the fraud without any legitimate entitlement to the money: 128 E. Davis Blvd, LLC; 310 78th Ave, LLC; 551 3rd Ave S, LLC; 604 West Azeele, LLC; 2101 W. Cypress, LLC; 2112 W. Kennedy Blvd, LLC; 5123 E. Broadway Ave, LLC; Blue Waters TI, LLC; BNAZ, LLC; BR Support Services, LLC; Bungalows TI, LLC; Capri Haven, LLC; EA NY, LLC; Equialt 519 3rd Ave S., LLC; McDonald Revocable Living Trust; Silver Sands TI, LLC; TB Oldest House Est. 1842, LLC.
Where, as in this case, the SEC seeks the return of funds to investors, the SEC frequently appoints a receiver to assist in marshalling assets on behalf of creditors, including injured investors. SEC-initiated receiverships frequently arise in connection with alleged fraudulent investment schemes.
The District Court entered an order on February 14, 2020, appointing Burton W. Wiand as Receiver. The Court directed the Receiver to (i) administer and manage the business affairs, funds, assets, and any other property of the defendants and relief defendants; (ii) marshal and safeguard the assets of the defendants and relief defendants; (iii) investigate the manner in which the affairs of the defendants and relief defendants were conducted and institute such legal proceedings for the benefit of the defendants and relief defendants and their investors and creditors as the Receiver deems necessary; and (iv) take whatever actions are necessary for the protection of the investors. The Receiver intends to fulfill his duties and responsibilities in an expedient and efficient manner. The District Court overseeing this Receivership has broad powers and wide discretion to determine the appropriate relief.