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FOX 66 News at Ten
Government agency accuses Mid-Michigan firm of wrongdoing
Joel Wilson considers himself someone who takes distressed properties and turns them into neighborhood gems.
"This is 420 S. Van Buren, it's our newest property. There's kind of a gaming cafe on the ground floor," Wilson said as he gave TV5's Jonathan Lowe a tour of his latest investment.
It was once a forgotten Bay City bar but now it's a hangout for teens.
"Kids come here. We've got a few regulars. They play their video games," Wilson added.
He is the owner of W.R. Rice Financial Services. It's an affiliate of both the Diversified Group and the American Realty Funds Corporation, which owns 74 investment properties across Saginaw and Bay counties.
"We collect rents on those properties. We pay out income," Wilson explained.
But the way Wilson flips properties is attracting some unwanted attention. An independent government agency known as the Financial Industry Regulatory Authority, or FINRA, filed a temporary cease-and-desist order on Nov. 5 against Wilson.
"They came in, they were looking for a Ponzi scheme, they didn't find one," Wilson said.
But FINRA accuses Wilson and his company of misrepresenting sales to investors, using invested funds to make unsecured loans to his own companies, conducting $390,000 in "highly questionable" transactions, fabricating documents submitted to FINRA, and failing to give full and complete testimony to FINRA. FINRA also says Wilson may have possibly misused investor funds to pay for a $5,000 trip to Las Vegas.
"I deferred about $6,000 worth of compensation over a four-month period. I was turning 30, I said, 'you know what, let's go use this and let's have fun,'" Wilson explained.
Right now, Wilson isn't facing any criminal charges, just a review of his professional practices. Wilson says the allegations of his financial wrongdoing are baseless.
"At the end of the day, the investor still receives the cash flow that they're promised. It's just the way that it was done was slightly different," Wilson said.
If Wilson fails to respond to the complaint, he could be fined, suspended or permanently banned from working in the industry.
Copyright WNEM 2012 (Meredith Corporation). All rights reserved.
Wednesday, November 14 2012, 08:38 AM EST
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