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Equialt LLC, a Tampa real estate company, and its principals, CEO Brian Davison and Managing Director Barry Rybicki allegedly operated a multi million Ponzi scheme, according to a Complaint filed by Securities and Exchange Commission under review by investor rights attorney Alan Rosca of the Rosca Scarlato LLC law firm. The Commission alleges that EquiAlt, Davison and Rybicki raised over $170 million from more than 1,100 investors by promising to acquire and manage distressed real estate assets.
The investor rights attorneys at Rosca Scarlato LLC law firm are investigating the EquiAlt, Davison and Rybicki’s alleged fraud scheme, and the potential liability of entities and individuals that played a role in, or assisted, the alleged fraud. Investors who believe they may have lost money in activity related to EquiAlt, Davison and Rybicki’s alleged fraud scheme are encouraged to contact attorney Alan Rosca or his colleague Paul Scarlato for a free, no-obligation discussion about potential recovery options. Call 888-998-0530 or email arosca@rscounsel.law to learn more.
According to SEC’s litigation release, on February 14 a federal judge granted SEC’s Motion requesting a Temporary Restraining Order and Asset Freeze against EquiAlt, Davison, Rybicki and sixteen companies charged by the Commission as relief defendants. A receiver was also appointed.
EquiAlt Allegedly Operated as a Ponzi Scheme Since Inception
According to a 2018 Tampa Bay Business Journal article, “EquiAlt was founded in the depths of the Great Recession to buy up foreclosed homes. In a 2015 interview, Brian Davison declared that he launched EquiAlt as part of an effort to reinvent himself after a previous lending company went bust and he had to file for bankruptcy.
Starting 2010, Brian Davison, a Florida resident, and Barry Rybicki, an Arizona resident, allegedly exercised control over the day to day operations of EquiAlt and its real estate investment funds: EquiAlt Fund, LLC, EquiAlt Fund II, LLC, EquiAlt Fund III, and EA SIP, LLC, the Complaint notes.
Allegedly, since the inception, the combined revenues generated by the EquiAlt Funds were insufficient to pay the interest owed to investors. EquiAlt, Davison and Rybicki told investors that 90% of their money would be used to buy real estate in distressed markets, and once the properties were rented or flipped to new owners, they would earn 8 to 10% annually, the complaint notes. Instead, less than half of investor money was invested in real estate causing the Funds to be unable to cover the principal and interest owed to investors, the complaint alleges.
The SEC goes on to state that Davidson and Rybicki misappropriated millions of investors funds to buy luxury items like expensive cars and charter private jets, and used money from new investors to pay returns owed to existing investors, in a Ponzi-like fashion.
EquiAlt Funds, Davison and Rybicki Accused of Engaging in Misrepresentations, Omissions, and False Claims
‘Davison and Rybicki made ‘too good to be true’ promises about nearly every material aspect of EquiAlt’s business’
said Securities and Exchange Commission Miami regional director Eric I. Bustillo in a press release about the lawsuit.
The aforementioned defendants allegedly made numerous misrepresentations and omissions to investors. They used unlicensed external sales agents and in-house 
employees to market and raise funds from the general public through cold calling, social media, and in-person meetings, the complaint states. The investors were unaware that over the course of several years the Funds paid $24 million in commissions to unlicensed third party sales agents using investor money, the complaint notes.
Most of the investors were unsophisticated and elderly, and were attracted by promises that their investment in EquiAlt Funds would be “safe”, “conservative”, and “low risk“. Moreover, the investors were assured that “EquiAlt could not go bankrupt”, the complaint notes.
EquiAlt, Davison and Rybicki falsely claimed that at least one Fund was registered with the Securities and Exchange Commission, the complaint alleges. The investors were also misled about the fact that the Funds were using licensed brokers, and that certain qualified persons were involved in the management of the Funds.
Finally, it is important to note that, as of the date of this article, there has not been a finding of liability as to the complaints or allegations mentioned in this article, unless otherwise indicated. Any reader should also read the original sources hyperlinked in this blog for accuracy, including any BrokerCheck report and/or record of any disciplinary or regulatory action. Those sources are incorporated by reference into the text of this blog, and are the governing materials in case of any inconsistencies or typos in this blog.
Securities Lawyer Investigating
The Rosca Scarlato LLC investment fraud lawyers represent investors who lose money as a result of fraud. Currently, our attorneys are investigating EquiAlt, and its principals, Brian Davison and Barry Rybicki’s alleged multi million Ponzi scheme. The goal of their investigation is to determine whether investors have additional claims for compensation against entities that may have assisted in the perpetration of the EquiAlt alleged fraud.
The firm takes most cases of this kind on a contingency fee basis and advance the case costs; payments for their fees and costs only come out of money recovered for clients. A securities lawyer and adjunct professor of securities regulation, attorney Alan Rosca has represented thousands of victimized investors, both in the United States and around the world, in cases ranging from arbitrations to class actions.
Investors who believe they may have experienced loss as a result of the EquiAlt’s alleged ongoing fraud may contact attorney Alan Rosca or his colleagues for a free, no-obligation evaluation of their recovery options. Investors can call 888-998-0530, email arosca@rscounsel.law, or use the contact form on this webpage to get in touch.
