SEC Alleges Wells Real Estate, Janalie Bingham Ponzi Scheme

In August 2024, the Securities and Exchange Commission announced charges against Wells Real Estate Investment, LLC, as well as its CEO Janalie Bingham and “undisclosed control person” Jean Joseph, alleging that they operated a $56 million Ponzi scheme[1]. MDF Law is investigating the West Palm Beach, Florida-based individuals for similar conduct. We urge investors who suffered losses investing in Wells Real Estate to contact us for a free, confidential consultation.

Charges Allege $56 Million Fraud by Wells Real Estate

According to an SEC litigation release[2], Wells Real Estate and the other defendants fraudulently raised $56 million or more from roughly 660 investors across the US. Much of this sum “came from investors’ retirement savings,” the regulator alleged. Its complaint[3] named 23 companies affiliated with Wells Real Estate as relief defendants. These companies include Cambridge Real Estate Management, 60 Yacht Club LLC, 930 Parkside LLC, 4100 Hospital Office LLC, Boca Deerfield Properties, and Oakland Land Property LLC. The release also notes that Mr. Joseph is a “previously convicted financial fraud felon.”

As alleged, the defendants represented to investors that Wells Real Estate operates a “$450 million real estate portfolio.” They also allegedly represented that it “only” used investors funds for real estate investments and improvements. They allegedly solicited investments in the company’s “Assets-to-Income Program,” offering promissory notes represented as “collateralized and secured by real estate.” These notes allegedly promised interest between 12% annually and 99% at the end of a three-year period.”

Defendants Allegedly Misused Funds “in a Ponzi-Like Fashion”

Despite these representations, the SEC alleged, only about $11 million in Wells Real Estate’s investors’ funds were used to buy property. Furthermore, these properties were allegedly “heavily financed through mortgages and generate insufficient income to pay promised returns to investors.”

At the same time, Ms. Bingham and Mr. Joseph diverted around $28 million in investors funds to “dozens of brokerage accounts,” according to the SEC. The complaint alleges further that they misused investor funds by “engaging in highly speculative futures and options trading, losing about $11.9 million of investor funds.”

The SEC’s allegations don’t end there. As the complaint alleges, the defendants paid undisclosed commissions totaling about $6.9 million to sales agents. They also allegedly misused approximately $10 million in investor funds on interest payments and redemptions, “in a Ponzi-like fashion.”

Furthermore, they allegedly represented Ms. Bingham as an accomplished real estate investor while concealing that Mr. Joseph, her husband and a convicted felon, co-managed the fund. As the complaint notes, he pleaded guilty in 2019 to one count of wire fraud. The charge stemmed from allegations that he misappropriated about $3 million while running his former company, Evergreen United Investments.

The U.S. District Court for the Southern District of Florida granted the SEC’s request for emergency relief, including asset freezes. Regulators are still seeking civil money penalties and disgorgement, as well as other sanctions against Ms. Bingham and Mr. Joseph.

Ponzi Scheme Losses? Call MDF Law

If you lost money investing in Wells Real Estate Investment, you may have recovery options. Call MDF Law[4] at 800-767-8040 for a free consultation with our seasoned legal team. We accept all cases on contingency—clients only pay a fee if they win their case—and offer free consultations across the country. Your time to file a claim may be limited, so don’t delay: call MDF Law today.