FOR IMMEDIATE RELEASE
July 29, 2009
Contact Jason Moon: 517-335-1700

LANSING - The Securities and Exchange Commission ( SEC) today obtained a court order to halt an alleged Ponzi scheme being conducted in the Detroit area by John Bravata of Brighton and Richard Trabulsy and their companies BBCEquities LLC and Bravata Financial Group, LLC.. The SECalleges that Bravata and Richard Trabulsy raised more than $50 million from at least 440 investors by offering them membership interests in a purported real estate investment fund with promised annual returns of 8 to 12 percent. However, not even half of the money raised was actually spent acquiring real estate, and Bravata and Trabulsy used money from new investors to make Ponzi-like payments to earlier investors. They also spent several million dollars of investor money on themselves and Bravata's family.

The Michigan Office of Insurance and Regulation (OFIR) notified the SEC earlier this year about the alleged Ponzi scheme after receiving consumer complaints and conducting its own investigation into BBCand Bravata. In March, OFIR ordered the companies to cease and desist from selling unregistered securities in the state. The defendants have challenged OFIR's order and the issue will be heard before an administrative law judge in October.

"OFIR's securities staff played a major role in the SEC's halting of this alleged $50 million Ponzi scheme," said OFIR Commissioner Ken Ross. "Protecting Michiganconsumers from financial scams remains a top priority for the agency."

The SEC's complaint alleges that the defendants told prospective investors that BBC Equities was a real estate investment fund and safe investment vehicle. However, the SECalleges that no more than $20.7 million of the more than $50 million raised since May 2006 through the sale of membership interests in BBCEquities was actually spent on real estate acquisitions. Furthermore, this real estate portfolio is highly leveraged with mortgages and other liabilities exceeding $128 million, and BBCEquities has never been profitable.

The SECalleges that Bravata and Trabulsy spent approximately $7.2 million of investor money for their own personal benefit. In order to keep their scheme afloat, they paid out $11.3 million in Ponzi-like payments by using new investment proceeds to pay distributions to earlier investors. They also spent $14 million soliciting and marketing the offering in order to continue the scheme.

To view OFIR's order visit: http://www.michigan.gov/documents/dleg/BBC_Equities_-_Cease__Desist_273078_7.pdf

To view the SEC's litigation release visit: http://www.sec.gov/litigation/litreleases/2009/lr21155.htm

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