Ponzi Scheme Portfolio Takeover
33’s primary goal on this project was to preserve value for the investors that were defrauded in this Ponzi scheme and demonstrate to the SEC that the properties were a viable going concern. In order to do so, we brought marketing efforts online and recalibrated pricing to boost rent. We also implemented a web-based property management software to control collections, executed headcount reductions, centralized reporting to 33’s corporate finance and accounting teams and addressed the critical deferred maintenance and existing property violations.
Over the course of 15 months, and through the heart of the pandemic, we maintained occupancy levels within 2% of pre-pandemic levels, increased average rents by 4% to $1,175 per unit, held collections consistent with pre-pandemic levels and realized a 16.5% reduction in operating expenses. The portfolio was orderly liquidated resulting in near 100% return of principal to all investors that were victims of the scheme.