LAWFUEL – US Legal Newswire – MICHAEL J. GARCIA, the United States Attorney for the Southern District of New York, announced the indictment of WILSON JAMES BASTON, JR., a/k/a “Wil James,” a/k/a “Will James,” by a
Federal Grand Jury in Manhattan earlier today. The Indictment
alleges that, over the past five years, BASTON defrauded victims
out of millions of dollars through Will James Equity Partners,
Inc., which purported to be a real estate investment program
which purchased distressed properties in the New York City area
as investment vehicles for long and short-term investors.
According to the Indictment:
From 2002 to the present, BASTON recruited over seventy
investors through false promises of guaranteed short-term, high
rates of return on investments in distressed properties, with
additional guarantees on the principal investment. BASTON
recruited investors in Will James Equity Partners, Inc., through
a variety of means including “word-of-mouth” referrals,
classified advertisements in newspapers such as the New York
Times, and promotional literature. According to a promotional
brochure, Will James Equity Partners, Inc., purchased so-called
“pre-foreclosure” property using funds from “a variety of equity
partners,” with terms determined on an individualized, ventureby-
venture basis.
The brochure stated that, “equity partners are
securitized by first mortgages on the property; paid interest at
above market rates; and receive their full equity loan in a
balloon payment together with an agreed upon bonus at the sale of
the renovated property.” BASTON documented the terms of these
investments in “Promissory Notes,” in which he promised to pay
interest rates, often as high as twenty or thirty percent, to the
investors along with a guaranteed return on their principal
balance within short periods of time, often thirty days or less.
On many occasions, BASTON initially repaid both the
invested principal and interest as promised, which served to
entice his investors to continue investing in Will James Equity
Partners, Inc., and in most cases, to invest additional, larger
sums of money.
To make these initial payments to new victims,
BASTON used monies from other investors, rather than from
purchasing, renovating, and “flipping” or reselling “preforeclosure”
properties as he had described to investors.
Because the victims believed these initial “investments” to be
successful, many victims thereafter agreed to roll-over their
invested funds into new investments, or often invested
additional, larger sums of money in the scheme.
Once the victims invested a significant amount of money
in Will James Equity Partners, Inc., BASTON ceased paying them
the promised interest and did not return their principal.
Eventually, when the victims began to complain to BASTON that he
had deceived them, BASTON employed a variety of lulling tactics
and avoided responding to their calls and inquiries. BASTON
specifically instructed his remaining staff members to deflect
inquiries from victims in order to avoid them. When BASTON was
unable to avoid these victims, he gave false explanations as to
why they had not been paid. Despite his claims to victims that
Will James Equity Partners, Inc., had financial difficulties and
was unable to pay back its current investors, BASTON continued to
recruit new investors in Will James Equity Partners, Inc., by
falsely representing the enterprise’s success. In some
instances, BASTON paid the most vocal victims with the funds he
received from these newer investors.
The Indictment alleges that BASTON obtained over $10
million from his victims pursuant to this scheme, and charges
BASTON with eleven counts of mail fraud and six counts of wire
fraud. If convicted on all counts charged in the Indictment,
BASTON faces a maximum of 85 years’ imprisonment.
BASTON was arrested on a Complaint issued on June 7,
2007, and is presently in federal custody pending trial.
Mr. GARCIA praised the efforts of the United States
Postal Inspection Service, the Federal Bureau of Investigation,
and the Criminal Investigators of the United States Attorney’s
Office in the investigation of this case.
Assistant United States Attorney GLEN G. McGORTY is in
charge of the prosecution.
The charges contained in the Complaint and Indictment
are merely accusations, and the defendant is presumed innocent
unless and until proven guilty.
07-204 ###
