FBI agents swooped into the homes of two AB Capital executives in Newport Beach and Laguna Beach to find evidence of an alleged Ponzi scheme that cost investors tens of millions of dollars.
Armed with search warrants, the federal agents seized documents as part of an ongoing criminal investigation into Joshua Pukini and Ryan Young, co-owners of the Newport Beach-based real estate finance firm, the Los Angeles Daily News reported.
The FBI also searched AB Capital’s former Newport Beach headquarters at 15 Corporate Plaza Drive, investors say.
In a broadcast on KCal News, the FBI agents were seen hefting boxes and bags of evidence from one of the homes.
The raids lasted hours, with FBI agents first barking on a bullhorn to those inside the homes, said Brian Werlemman, a wealth manager who alleges he was fleeced out of $2.7 million in 2018 during an elaborate Ponzi scheme involving the company.
He claims around 100 others, many from Orange County, were duped into investing with the company.
“There was approximately upwards of $100 million involved,” Werlemman, who says he was the largest investor, told KCal News. “These are first and second trust deeds, where we started noticing bizarre things were happening — and money was missing, literally missing.”
Laura Eimiller, spokeswoman for the FBI in Los Angeles, confirmed the raids, saying they’re connected to an ongoing criminal investigation. She declined to provide further details.
Neither of AB Capital’s two principals could be reached for comment by the Daily News. Information wasn’t available on whether they face criminal charges.
Werlemman said he has cooperated with the FBI and the U.S. Internal Revenue Service.
The investigation follows an involuntary bankruptcy foisted upon AB Capital by disgruntled investors in 2022, he said. A civil lawsuit tied to the bankruptcy names Pukini and Young, alleging breach of fiduciary duty, conversion and other offenses.
It seeks $50 million or more in damages.
AB Capital is described in the suit as a real estate investment company that provides loans, then syndicates and sells fractional interest in those loans to investors.
“Prior to bankruptcy, debtor and its principals breached their fiduciary duties by looting and fraudulently transferring debtor’s assets, misappropriating debtor’s business opportunities, and defrauding creditors, the complaint says.
Werlemman, commenting on the alleged Ponzi scheme, said the defendants took real estate properties and liquidated them to return funds to investors.
“It looks like there are going to be cents on the dollar when everything is done,” he told the Daily News. “The civil suit is trying to unwind the tangled mess.”
The complaint alleges Pukin and Young refused to turn over AB Capital’s accounting records and destroyed documents, to the “shock and utter amazement” of a court-appointed bankruptcy trustee.
The trustee’s examination of AB Capital’s electronic and hard files on Oct. 7, 2022, revealed there were no files of any kind left on computers other than 80 files found in the computer’s “trash,” the complaint alleges. Additionally, large filing cabinets in a conference room at AB Capital’s headquarters were allegedly empty.
It is also alleged that Pukini lied about the disposition of AB Capital funds and misappropriated or fraudulently transferred proceeds, according to the Daily News.
AB Capital, founded in 2016, claims the firm makes “disciplined investments in targeted markets,” according to its website, with its founders having completed more than $1 billion in real estate deals.
— Dana Bartholomew
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The post OC homes of AB Capital owners raided by FBI in alleged scam inquiry appeared first on The Real Deal.
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