Cabot Investment Properties Under Investigation
From the Desk of Jim Eccleston at Eccleston Law LLC:
Timothy J. Kroll and business partner Carlton P. Cabot were arrested for allegedly defrauding investors in various Cabot Investment Properties LLC-sponsored real estate investments.
The men allegedly defrauded investors by taking funds belonging to tenants-in-common investments and providing false financial reports to investors to conceal their illegal actions.
The two are accused of misappropriating over $17 million. According to the U.S. Attorney’s Office, the money was used for expensive cars, apartments, and private schools.
While Cabot Investment Properties LLC legally was allowed to collect “excess” income from TIC investments, the two allegedly transferred funds from the bank accounts before the money could be used for expenses and disbursements among the investors. In 2012, when Cabot Investment Properties LLC folded, Kroll and Cabot owed the $17 million to TIC investments. Investors also lost $240 million in their overall principal investment in the company.
Kroll and Cabot have since been released on a $1 million bond, but face a maximum prison sentence of five to 20 years.
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