Investment Company Owner Charged with Fraud
Las Vegas, Nev. – Connie S. Farris, the owner/operator of Global Express Capital Corporation was indicted today by the Federal Grand Jury on multiple counts of Mail Fraud for inducing people to invest in deeds of trust that reportedly paid high interest rates but which did not exist, announced Steven W. Myhre, Acting United States Attorney for the District of Nevada.
Connie S. Farris, age 62, is charged with 61 counts of Mail Fraud. A warrant was issued for her arrest. She faces up to 20 years in prison and a $250,000 fine on each count.
According to the Indictment, Connie S. Farris owned several companies which were in the business of loaning money to real estate developers for the purchase of undeveloped land. Although separate entities, these companies, Global Express Capital Corporation, Global Express Capital Mortgage Corporation, Global Express Securities, Inc., and Global Express Capital Real Estate Investment Fund I, LLC, operated as one business and are hereafter referred to as "Global Express."
Global Express obtained the money it loaned to the developers from private investors who heard about the investment opportunities by word of mouth or through advertisements in the Las Vegas Review Journal. The advertisements usually stated that Global Express was seeking investors for first deeds of trust and that they would receive interest at the rate of 14% per year.
There were five non-existent real estate projects for which defendant Farris solicited investments identified as follows:
1. Lone Mountain - The development of single family homes on 5.4 acres of land in Las Vegas, for which the defendants received $308,000 from investors;
2. 26 Lots 2nd - The construction of 26 homes in four subdivisions in Las Vegas, for which the defendants received approximately $1.28 million from investors;
3. Scenic Hills - The acquisition and development of 29 acres of commercial property in St. George, Utah, for which the defendants received approximately $191,000 from investors;
4. Crystal Cove, Rancho Mirage - The development of 11.6 acres of land in Rancho Mirage, California, for which the defendants received $625,000 from investors; and
5. Bishop Vacant Land - The acquisition of 1.47 acres of commercial real estate in Bishop, California, for which the defendants received $402,000 from investors.
Generally, it is alleged that from about November 2001 to December 2003, defendant Farris made false and fraudulent representations and omissions of material facts to investors regarding whether loans were secured by deeds of trust in order to prevent investors from suspecting that their loans were not secured.
Specifically it is alleged that, defendant Farris failed to tell investors that the loans on specific real estate projects never funded or closed and that their investments had not been secured by deeds of trust. Defendant Farris lulled the investors in the non-existent loans into a false sense of security by causing them to receive monthly interest checks and other materials related to their investments. By so doing, defendant Farris prevented the investors from becoming suspicious about her actions and from taking action against Global Express.
Beginning in 2002, defendant Farris encouraged investors, including investors in the non-existent loans, to transfer their interest in the trust deed investments to a Global Express security investment that Farris referred to simply as "The Fund." Defendant Farris caused investors in the non-existent loans to sign assignments of their interest in their deeds of trust to the fund when defendant Farris knew that these investors' funds had not been secured by deeds of trust.
Defendant Farris represented to investors that The Fund was a safer investment because it pooled investors' funds and spread the investors' risk by lending their funds to multiple real estate developers on multiple real estate projects. In reality, the majority of investments in the fund were from investors who transferred defaulted and non-existent trust deed investments into The Fund.
Defendant Farris caused investors to believe that The Fund was a more secure investment by making regular monthly interest payments of approximately 12% regardless of the amount of interest actually collected from developers. Defendant Farris knew that The Fund was not nearly profitable enough to support the interest payments. In calendar years 2002 and 2003, the Fund received approximately $513,000 in interest income, nevertheless during that same time period, defendant Farris caused the Fund to pay approximately $3,700,000 in interest payments. Defendant Farris funded the inflated interest payments with cash from new investors, capital contributions, and proceeds from the sale of real estate assets held by the Fund.
The case is being investigated by the Federal Bureau of Investigation and prosecuted by Assistant United States Attorney Brian Pugh.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.