fbi raid grapevine
According to media reports Friday, Grapevine-based real estate investment firm United Development Funding (UDF) was raided by the FBI on Thursday in the wake of allegations brought against the company by a Dallas hedge fund manager who accused the company of operating a $1-billion “Ponzi-like scheme.”
“Worst case scenario, they lose their money,” said Candace Carlisle with the Dallas Business Journal.
The paper reports boxes believed to be filled with company documents were carried out of the building Thursday afternoon.
Carlisle has followed the story from the beginning.
“The allegation is that they created new real estate investment funds to pay old real estate investment funds and investors,” she said, “making it appear that it was a successful … firm versus one that maybe had some losses.”
According to Carlisle, the allegations started with Dallas hedge fund manager Kyle Bass — he’s accusing the real estate investment firm of operating a $1 billion ponzi-like scheme.
“Thousands and thousands of investors,” Carlisle said. “I’ve talked to some folks kind of in the know, and it seems like a lot of these investors probably purchased some fund agreement or something where they would go in on this investment.
“They may not actually know they are an investor in UDF, unless you read the small print or something like that.”
It’s too soon to tell how this will affect some of the region’s biggest developments. But the company’s CEO has denied any wrongdoing.
He went on to tell the Journal that Bass has spread false information.