The Securities and Exchange Commission today announced that it filed an emergency action against California-based real estate development company SiliconSage Builders LLC, aka Silicon Sage Builders, and its sole owner, Sanjeev Acharya, in connection with an alleged $119 million fraudulent offering.
According to the SEC’s complaint, Silicon Sage Builders and Acharya raised money from approximately 250 retail investors, most of whom were members of the Northern California South Asian community, by falsely describing Silicon Sage Builders’ real estate business as profitable and promising investors exorbitant returns. In fact, as the complaint alleges, from 2016 to 2019, all but one of Silicon Sage Builders’ projects had significant cost overruns and did not generate enough money to pay investors the promised returns. Acharya, as alleged in the complaint, misled investors into believing the payments they received were derived from Silicon Sage Builders’ profits when, in reality, Silicon Sage Builders and Acharya had used new investor funds to pay earlier investors. The complaint also alleges that Acharya misled investors as to the amount of money the company was attempting to raise and falsely told investors they could redeem their investments despite there being insufficient funds to meet redemption requests.
“As we allege in our complaint, wrongdoers sometimes prey on the trust of members of their communities to raise funds for their fraudulent schemes,” said Alka Patel, Associate Regional Director of the SEC’s Los Angeles Regional Office. “Affinity frauds are particularly harmful to retail investors, and this case demonstrates the SEC’s commitment to pursuing such schemes and protecting retail investors.”
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