SACRAMENTO (CN) - The SEC says two Sacramento-area men defrauded real estate investors of $10 million by promising 12 percent returns on money that would be loaned to homebuyers, secured by deeds of trust. The agency sued Lawrence "Lee" Loomis and his father-in-law, John Hagener, and their companies, Loomis Wealth Solutions and Lismar Financial Services.
Loomis and Hagener claims they would put their roughly 100 victims' money into "two supposed real estate investment fund - the Naras funds," the SEC says in its federal complaint.
"In fact, the claims were not true. Loomis and Hagener were secretly diverting investor funds to finance the operations of other companies they controlled. Rather than investing in real estate secured by deeds of trust, Naras Funds money was commingled with money of several entities Loomis or Hagener controlled, and then spent on operating expenses, such as payroll, utilities, travel, and other expenses Loomis incurred in a failed real estate scheme," the complaint states.
"During 2007 and 2008, when Loomis' other companies were losing money and financing their operations with money from the Naras Funds, Loomis took hundreds of thousands of dollars from those companies for himself.
"Even though Hagener was misappropriating the Naras Funds' assets to fund other businesses, and not advancing the interests of Naras Funds investors, investors' money was also spent to pay Hagener more than $190,000 to run the Naras Funds."
The SEC seeks accounting, disgorgement, injunctions and penalties.
Loomis, 52, lives or lived in Granite Bay, Calif.; Hagener, 73, in Rosedale.