Investors in a nearly $22 million plan for a new airport in Belize were bilked out of their money, much of it spent by their Sag Harbor fund manager on his “life of luxury,” federal prosecutors said on Wednesday.
Brent Borland, 48, spent about $6 million of the investors’ money — according to the U.S. Securities and Exchange Commission — on a variety of personal expenses, authorities said in announcing his arrest on securities and wire fraud charges.
The SEC complaint alleges Borland used investor funds for personal expenses and unrelated business expenses, including mortgage and property tax payments on his family’s Florida mansion, multiple luxury automobiles, private school tuition for his children, $36,000 for his family’s beach club membership, and almost $2.7 million to pay off credit cards. Borland also allegedly deceived investors by pledging the same collateral to multiple investors.
The owner and principal of the Manhattan-based Belize Infrastructure Fund, Borland assured approximately 40 investors the money they invested with him from 2014 through March 2018 was just temporary or “bridge” financing and, “would be fully secured by real property in Belize” the statement said.
“In reality,” the authorities said, “some of the real property [that] investors were told secured the debt did not even exist.”
Last year, a few investors in the Belize Investment Fund I LLC, set up to construct the airport, obtained default judgments against Borland after suing him for fraud and other charges, court documents show.
Spokesmen for U.S. Attorney Geoffrey S. Berman did not respond to inquiries about whether the criminal case sprang from the lawsuits. Nor was a spokesman immediately available to say what became of the approximately $14 million Borland did not spend on personal or family expenses.
Postal Inspection Service Inspector-in-Charge Philip R. Bartlett said: “Brent Borland allegedly lied to investors and inappropriately used their investment funds to finance a life of luxury.”
Both he and Berman warned against investments that sound “too good to be true.”
Borland faces a maximum sentence of 5 years in prison on the count of conspiracy to commit securities and wire fraud. Each of the other two counts — securities fraud and wire fraud — could result in a 20 year sentence, prosecutors said.
U.S. Magistrate Judge Barbara Moses released Borland on a $2 million bond, secured by his Sag Harbor home, a U.S. Attorney spokeswoman said by email, adding three “financial responsible” individuals served as co-signers.
Borland was forbidden from traveling outside the Southern District of New York, which encompasses much of New York City and White Plains, and the Eastern District of New York, which includes Brooklyn and Long Island, the email said.
He also was required to hand over all travel documents and barred from applying for new ones, the spokeswoman said.
The suspect is forbidden from having any contact with investors — or soliciting investments, she said.
Borland’s Manhattan attorney David Gehn could not immediately be reached for comment.