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National Realty committee seeks Ponzi scheme ruling from court
By Sarah Lizee
Olympia, Wash., July 12 – National Realty Investment Advisors, LLC’s official committee of unsecured creditors is seeking an order finding that the company engaged in a Ponzi scheme, according to a motion filed Tuesday with the U.S. Bankruptcy Court for the District of New Jersey.
The committee said the debtors were engaged in a Ponzi scheme from at least January 2016 through May 2022.
“NRIA operated its investment fraud by paying existing investors with funds from new investors or even the investors’ own money,” the committee said in the motion.
“Instead of using investor money to generate actual earnings, NRIA used the money to fund the personal expenses of NRIA insiders and advertise the scheme to attract new investors.”
The group said the company induced new investors to invest in the scheme by promising unheard of guaranteed returns of up to 21%.
“NRIA spent tens of millions of dollars on advertising these guaranteed returns to innocent investors,” the committee said.
The group said investors would invest in the scheme in various ways throughout NRIA’s existence including by investing in limited liability companies that held and were to renovate specific properties and, later, by pooling their money into an investment fund.
“NRIA created these new business structures as escape routes designed to induce investors to continue investing in NRIA to prolong the scheme’s inevitable collapse,” the committee said.
Other government agencies have found that the company operated as a Ponzi scheme, including the New Jersey Bureau of Securities and the Securities and Exchange Commission.
The Secaucus, N.J.-based real estate investment, management and development firm filed bankruptcy on June 7, 2022 under Chapter 11 case number 22-14539.
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