An Atlanta area retirement community developer with a history of run-ins with securities industry watchdogs has been accused a running a scheme that diverted millions of dollars from nursing home investments to his personal use.
The Securities and Exchange Commission claims Christopher F. Brogdon misappropriated a portion of more than $190 million he raised from investors, comingling assets and using investor cash for his own expenses and to fund other businesses, according to a civil lawsuit filed Friday in U.S. District Court in Newark, N.J.
Those personal and business expenses included maintenance, hanger costs and the salaries for pilots for two aircraft Brogdon used, the lawsuit says.
“Brogdon secretly diverted a portion of the proceeds to either pay for his and his wife’s lavish lifestyles or to prop up his entire business enterprise, which included other facilities, restaurants, and commercial real estate holdings,” the suit said.
The SEC obtained an emergency order freezing his assets and those of related companies.
A message left for Brogdon’s attorney was not immediately returned.
The suit says Brogdon, 66, raised money from investors through municipal bond and private placement offerings. Investors were to earn interest from revenue from the facilities. He was involved in dozens of such offerings to buy, renovate or manage nursing homes or assisted living facilities since 1992, it says.
The lawsuit says he got loans from others to help pay off investors and concealed from investors the financial performance of facilities tied to bond offerings. It says he started comingling funds as early as 2000.
Brogdon formerly served as chairman of Retirement Care Associates, Contour Medical and NewCare Health Corp., and recently announced his resignation from the board of Georgia-based AdCare Health Systems. He’s also the CEO of Global Healthcare REIT, according to the SEC.
Brogdon ran afoul of an industry watchdog group in the 1980s as a former broker and later as a former officer in a company called Harbor Town Securities Corp.
According to reports from The Atlanta Journal-Constitution at the time, Brogdon was fined for making unauthorized bond purchases while he was a broker and barred from any association with a National Association of Securities Dealers (now known as FINRA) member for conducting municipal bond transactions when Harbor Town had insufficient net capital.