Scottsdale accountant rearrested in Ponzi case
May 23rd, 2009 by Vinny
This is what happens when greed takes over:
A former Scottsdale accountant was rearrested Friday in connection with what authorities described as a $67 million real-estate Ponzi scheme.
Dan Wise, 52, was arrested by Scottsdale police after a Maricopa County grand jury indicted him Thursday on multiple theft and fraud charges.
Wise was being held on a $500,000 cash bond, according to police. Wise was previously arrested by Scottsdale police in April, but he was released as the investigation continued, a police spokesman said.
The Arizona Corporation Commission ordered Wise and his affiliated companies on Wednesday to pay almost $67 million in restitution and $5.4 million in administrative penalties for defrauding at least 125 investors in multiple states in a promissory note scheme. It is one of the largest securities sanctions ever levied by the commission, according to a commission release.
Last month, detectives and federal agents served search warrants at Wise’s Scottsdale residence, businesses and a storage facility, police said.
In April, the U.S. Securities and Exchange Commission obtained a temporary restraining order against Wise and froze his assets. Authorities believe the former certified public accountant targeted his clients in a multi-million dollar real estate investment scheme, according to a SEC statement.
The Commission’s complaint names Wise and his four companies – Whispering Winds Properties, LLC; LM Beagle Properties, LLC; Karlena, Inc.; and Axis International, Inc.
The complaint alleges that Wise solicited tax and accounting clients, along with their friends and family, and encouraged them to borrow money to invest in his real estate holdings.
From July 2001 to January 2009, Wise raised more than $67 million from about 125 investors by touting his 10 to 15 years of experience in real estate investments, authorities allege. He lured investors with promises of lucrative annual returns ranging from 12 percent to 22 percent.
Wise claimed to use investor funds to make short-term real estate loans that would be fully secured, and assured investors they could obtain their money anytime with a 24- to 48-hours notice, according to the complaint.
However, the complaint further alleges Wise never funded real estate loans, never paid the promised returns to investors, and never honored investors’ redemption requests.
