Texas Stops Fraudulent Private Equity Scheme

Jul 1

Securities Commissioner Travis J. Iles entered an Emergency Cease and Desist Order against Prestige Equity and others accused of illegally offering lucrative investments tied to a private equity fund.

According to the order, the parties are claiming investors become limited partners in the private equity fund and their principal is used for a variety of purposes – such as creating secured, high-interest asset-backed small business loans and investing in real estate.  These transactions purportedly generate sufficient revenue that ensures Prestige Equity can guarantee payment of 12% annual returns to investors. 

According to the order, it’s actually a fraudulent scheme.  Although Prestige Equity is telling investors they will become limited partners in the private equity fund, investors do not actually purchase limited partnership interests.  According to the order, investors execute a contract that simply provides they open accounts at Prestige Equity – not that they purchase limited partnership interests in any type of fund.   

The parties are also telling potential investors the company was founded in Dallas in 2001 – and providing investors with an address for its headquarters.  According to the order, however, the parties did not organize Prestige Equity at any time prior to 2021 and it does not maintain an office at the address provided to investors.  The promoter is concealing its real location, according to the action. 

The order also names Robert Clemmons, Felix Crayborn, Grant Myers, William Clark and Miranda Shawns.  The parties have not been registered to sell securities, and the private equity investments have not been registered or permitted for sale in Texas. 

The parties have 30 days to challenge the order. 

Contact: Joe Rotunda, Director of Enforcement, at jrotunda@ssb.texas.gov