A Collin County grand jury has indicted the owners and operators of North Forty Development and Texas Cash Cow Investments for securities fraud and money laundering.
The Texas Securities Board announced this week that Phillip Michael Carter of Frisco has been charged with providing misleading information to more than 90 individuals to get them to invest more than $17 million into his commercial and residential real estate projects.
Instead, he used the money for personal expenses, including paying the IRS for back due taxes.
State securities officials, working with the Collin Co. District Attorney’s office, also charged Carter’s wife, Shelley Noel Carter, with money laundering and misappropriating investor funds.
Collin Co. officials also charged Richard Gregory Tilford of Arlington, who worked with Carter, with selling $6 million in fraudulent real estate investments in the form of promissory notes.
The indictment states that Carter did not disclose to potential investors that he and one of his sales agents, Bobby Eugene Guess, has received target letters from the U.S. Attorney’s Office notifying them that they were under federal investigation for securities and mail fraud, as well as money laundering. Guess pleaded guilty to securities fraud charges in July and is serving a 12 year prison sentence.
Texas Securities Board officials, in a statement issued Wednesday, said that all 90 investors are endangered of losing all of their money because Carter borrowed $32 million from a Seattle private equity fund last month under the condition that the fund hold first lien rights.