North Texas real estate developer Phillip Michael Carter and two of his colleagues – already facing state criminal fraud charges – found themselves the target of new securities fraud allegations Friday afternoon.
The U.S. Securities and Exchange Commission filed charges in federal court in Dallas accusing Carter and his companies, including North-Forty Development, Texas Cash Cow and Texas First Financial with raising more than $44 million from more than 270 financial investors by making “materially misleading statements and omissions.”
In a 23-page complaint filed Friday, the SEC’s Fort Worth Regional Office states that Carter “misappropriated investor funds to pay off personal tax liens, fund his lifestyle and make Ponzi payments to investors.”
The SEC also charged Bobby Eugene Guess and Richard G. Tilford of related charges. Guess had to be served with the federal court documents in his state prison cell, where he is doing time for criminal charges. Tilford, a 60-year-old Fort Worth resident, is also under indictment by state authorities.
SEC Regional Director Shamoil Shipchandler, whose last day on the job at the federal agency is today, stated that Carter, Guess and Tilford sold short-term, high-yield promissory notes issued by a number of shell companies intentionally named to confuse investors.
“Phillip Carter and his co-defendants lied about the nature of their investments and enriched themselves at their investors’ expense,” Shipchandler said.
The SEC complaint states that Carter used investor money for personal reasons, including:
- $800,000 in cash withdrawals;
- $124,000 for a private jet
- $39,000 for Dallas Cowboys tickets; and
- $500,000 in cash transfers to his personal bank accounts.
The SEC’s investigation was conducted by Jason A. Braun and Michelle Lama, and supervised by Jim Etri, B. David Fraser, and Eric R. Werner. The litigation is being conducted by Matt Gulde.