James P. Toner Jr Settles Fraud Charges – Posted by Brenda Hamilton

Investment manager-fraud

The Securities and Exchange Commission (SEC) on February 14, 2017 announced that James P. Toner Jr, a purported real estate investment manager has agreed to pay more than a half-million dollars to settle charges that he pocketed investor money in an investment scheme.

The SEC alleges that James P. Toner Jr. of Scottsdale, Ariz., siphoned $51,000 from investors who were falsely told that he would personally manage some of the real estate projects in which they were purchasing interests.  The stated purpose of each investor offering was to purchase a residential property in the Phoenix area, renovate that property, and then sell it for a profit.               

According to the SEC’s complaint, Toner took $31,000 in undisclosed management fees even though he did not manage any of the offerings, and stole $20,000 directly from an investor.  Without conducting any due diligence, Toner allegedly entrusted the management of the investments to a real estate broker who subsequently squandered investor funds.  According to the SEC’s complaint, the real estate broker was later imprisoned for other crimes.

In addition to falsely stating that he planned to personally manage some of the properties, Toner allegedly told investors he would make personal investments in the projects when in fact he never did.  In order to skirt the registration requirements for the offerings, Toner allegedly instructed some investors to falsely state that they were accredited investors.

“As alleged in our complaint, Toner defrauded investors with false promises that he would manage their investments and personally invest along with them.  Instead he siphoned off some investor money as management fees and handed over the rest to a third party without any due diligence,” said Andrew M. Calamari, Director of the SEC’s New York Regional Office.

Without admitting or denying the allegations, Toner consented to the entry of a court order requiring him to pay disgorgement of $51,358 plus interest of $4,893.98 and a penalty of $450,000.  The settlement is subject to court approval.

For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956 or by email at info@securitieslawyer101.com.   This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute, legal and compliance advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.

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