SEC Charges Dallas-Area Developer With Swindling Elderly Investors

SEC

The Securities and Exchange Commission has filed charges against North Texas-based real estate developer Phillip Michael Carter, two other individuals and several related entities, charging them with fraud.

The SEC's complaint alleges that Carter and the others bamboozled over 270 investors nationwide, many of them elderly, netting almost $45M from their schemes. Carter is the principal of Texas Cash Cow Investments and North Forty Development, based in Frisco.

The SEC charges Carter sold high-yield promissory notes issued by shell companies intentionally named to confuse investors. The sellers claimed to offer investments in his legitimate real estate development companies, backed by assets from actual real estate developments.

Instead, the complaint alleges, the defendants sold securities issued by unrelated but closely named entities that held no assets. Carter then allegedly misappropriated the funds to pay $1.2M toward a personal tax lien, operate a luxury hunting ranch, fund his lifestyle and make over $3M in Ponzi scheme payments to investors.

"Phillip Carter and his co-defendants lied about the nature of their investments and enriched themselves at their investors' expense," the SEC Fort Worth Regional Office Director Shamoil Shipchandler said in a statement.

In related criminal proceedings by the Texas State Securities Board, Carter and an associate were indicted in November for securities fraud, sales of unregistered securities and sales of securities by an unregistered agent or dealer. Those charges remain pending.

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