The Securities and Exchange Commission said Tuesday that it sued an Irvine real estate firm and seven of its employees for deceiving investors as part of an alleged $50-million fraud.
Real Estate Partners Inc. defrauded about 1,600 people by enticing them with "promises of lucrative returns" from properties the firm said it was buying and managing, the SEC said.
Instead, money raised from January 2003 to August 2006 was used for employee sales commissions and to pay off earlier investors, the agency said.
The SEC sued firm President Dawson Davenport and employee Michael Owens. They allegedly disseminated sales materials that said investors would receive an average annual return of 54%.
The SEC also sued salesmen Richard McGill, William Sanders, Michael Tuchman and Danny Rayburn, and alleged boiler-room operator Donald Ryan.
Attorneys representing Davenport, Owens and Ryan declined to comment. A lawyer representing McGill, Sanders, Tuchman and Rayburn didn't immediately return a phone call seeking comment. The firm's attorney, John Giovannone, said he couldn't comment.