Department of Justice
Office of Public Affairs

FOR IMMEDIATE RELEASE
October 13, 2011

QUADWEALTH FOUNDER GUILTY IN MULTIMILLION DOLLAR INVESTMENT FRAUD SCHEME

PLANO, Texas – A 41-year-old Dallas man has pleaded guilty for his role in a multi-million dollar real estate fraud scheme in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.

Jeffrey Brown pleaded guilty to an Information charging him with conspiring to defraud investors in a real estate fraud scheme that is alleged to have involved over $17 million and 82 investors throughout the United States.  Brown entered his plea today before U.S. Magistrate Judge Don D. Bush.

U.S. Attorney Bales announced the guilty plea, noting that, “Investment fraud is predicated on the betrayal of trust by one person to another.  These victims believed that they were investing safely for their future, and instead lost their hard earned savings to fraud and deceit.  We are committed to bringing those individuals who commit such crimes to justice.”

            According to information presented in court, from 2006 through 2010, Brown and another individual controlled Quadwealth, a company that marketed itself as an exclusive financial planning and wealth management group in which membership provided access to significant investment opportunities and a team of investment advisors and other professionals.  Quadwealth marketed itself extensive through its website and through promotions on radio stations throughout the Dallas/Fort Worth area, including on WBAP 820 AM, KRLD 1080 AM, and KBKY 680 AM.  However, in order to induce individuals to invest with Quadwealth, Brown and other individuals intentionally made numerous false representations to these individuals, including representations that the investors could earn over 100 percent in annual returns, that the investments were safe and liquid, that the investments were investment grade and guaranteed never to lose value.  Brown and other individuals also failed to disclose to their investors that Quadwealth would use investment capital to pay for the personal expenditures of Brown and others.

           This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force.

            President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

            Brown faces up to 5 years in federal prison on the conspiracy charge.  A sentencing date has not been set.

            This case is being investigated by the FBI and is being prosecuted by Assistant U.S. Attorney Shamoil Shipchandler.

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