Man Say Real Estate Scam Took Millions
SANTA ANA, Calif. (CN) - Father-and-son scammers defrauded real estate investors of millions of dollars, two men say in a lawsuit that claims they each lost $100,000 in the scheme.
Dennis Stearns and Craig Smith sued Edward Theodore Embry, his father Michael Patrick Embry, their attorney Michael D. Davis, and Red Rock Servicing II LLC, in Federal Court.
Edward Embry is an Orange County real estate broker.
His father Michael Embry is a "well-known Phoenix real estate broker and developer," according to the complaint.
In the 11-page lawsuit, Stearns and Smith claim the Embrys reeled in investors with an ad for a $1 million investment vehicle purporting to buy distressed California real estate, rehab it and sell it for a profit.
The Embrys promised a minimum return of 15 percent a year and a "total refund" after one year, the plaintiffs say in the complaint.
Stearns and Smith say they each invested $100,000 in the Embrys' Newport Beach firm, Red Rock Servicing, in September 2010.
"However, the investment was nothing more than a fraudulent scheme to dupe unwary investors out of millions of dollars," according to the complaint. "The plaintiffs in this action are two such investors who were each 'scammed' out of more than $100,000 each, (totaling over $200,000)." (Parentheses in complaint.)
Stearns and Smith say the Embrys refused to refund their money.
They seek actual, incidental, contractual and punitive damages, attorney fees and costs for securities fraud, constructive fraud, breach of contract, conversion, unjust enrichment, and alter ego.
They are represented by Elliot Stone with The Stone Law Firm.