A Boca Raton couple has been accused of misappropriating the majority of $56 million raised from 660 investors nationwide for supposed real estate ventures, according to a lawsuit filed by the Securities and Exchange Commission (SEC).
West Palm Beach-based Wells Real Estate Investment, led by CEO Janalie C. Bingham and her husband, Jean Joseph, allegedly misled investors by promising their funds would be used to acquire, develop, and renovate commercial and residential properties across South Florida. Instead, the SEC claims that only $11 million of the raised funds went into real estate investments. The remaining $28 million was reportedly diverted into speculative options and futures trading, which resulted in losses of at least $11.9 million.
The SEC's civil suit charges Wells, Bingham, and Joseph with violations of federal securities laws, including antifraud and broker-dealer registration provisions. Additionally, 23 entities linked to Wells are named as relief defendants, as they were used to open brokerage accounts at various firms.
Attempts to contact Wells’ West Palm Beach office have been unsuccessful, with the phone number disconnected. Neither Bingham nor the company responded to LinkedIn messages seeking comment, and Joseph could not be reached.
On August 14, federal Judge Donald M. Middlebrooks in West Palm Beach granted the SEC’s emergency motion to freeze the assets of Wells, Bingham, and Joseph. The ruling also requires them to provide sworn accountings and prohibits the destruction of records. Andrés Rivero has been appointed as the receiver over Wells and the 23 relief defendants.
The SEC initially filed its complaint on August 12, but it was not unsealed until recently.
This case adds to a string of significant real estate fraud allegations in South Florida. Notably, former Venezuelan officials and a Swiss banker were recently sentenced in a $1.2 billion embezzlement scheme involving laundered funds used to purchase a unit at the Porsche Design Tower in Sunny Isles Beach.
In the Wells case, the SEC alleges that $6.9 million was diverted to pay commissions to sales agents and $10 million was used to cover interest payments and note redemptions in a Ponzi-like scheme. Additionally, Bingham and Joseph are accused of using at least $1.8 million for personal expenses, including groceries, luxury vehicles, cash withdrawals, and a $293,000 settlement for a separate lawsuit.
Last year, a Wells-related entity purchased a five-bedroom home at 930 Parkside Circle North in Boca Raton for nearly $2 million. The property was then transferred to Bingham for a nominal fee of $10 in August.
Operating from 2020 until earlier this year, Wells presented itself as a legitimate enterprise, boasting a $450 million real estate portfolio and promoting Bingham’s personal achievements in building a property portfolio valued over $100 million. However, the SEC reveals that Wells’ actual portfolio consisted of 34 properties valued at approximately $46 million at the time of purchase.
Wells attracted investors through a promissory notes investment platform called the “assets-to-income program,” which promised high returns of 12 percent annual interest for notes with terms ranging from 18 to 28 months. Investors who opted to forgo monthly interest payments were promised a 99 percent return at the end of 36-month terms. Many investors reportedly used their retirement funds, only to find that Wells’ properties generated insufficient income to cover expenses and repay investors.
In February, Wells and Bingham faced a foreclosure lawsuit from lender Best Meridian over a $7.2 million loan for the Bank of America Financial Center at 3661 West Oakland Park Boulevard in Fort Lauderdale.
The SEC also highlighted that Joseph, a convicted felon, had a history of financial misconduct. In 2019, he pleaded guilty to wire fraud for misappropriating $3 million while running Evergreen United Investments. He was sentenced to 15 months in prison and ordered to pay restitution, and is currently on supervised release.
Posted by Larry Mastropieri on
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