A San Francisco crowdfunder with a history of financial crimes defrauded investors out of millions of dollars by misappropriating funds as his firm was bleeding cash, a recent complaint by the Securities and Exchange Commission alleges.
Bernardo Mendia-Alcaraz, who heads Toltec Capital, allegedly told investors their capital would fund loans to residential real estate buyers and developers. Instead, he paid himself and other investors, in what the SEC characterizes as a ponzi-like scheme.
Toltec did not return a request for comment. Mendia-Alcaraz, who also goes by Mendia, could not be reached.
The 52-year-old crowdfunder inflated his resume to lure investors.
Between 2019 and 2023, Mendia solicited over $3 million from 41 investors by marketing himself as a “well-educated” professional with a “long track record of success,” the complaint reads. He flaunted “academic credentials” from the Godman School of Public Policy at the University of California at Berkeley.
In truth, Mendia never went to UC Berkeley and was held in a California detention center during the 2008 financial crisis for previous alleged financial crimes. He had also filed for bankruptcy six times in 2019, the same year he started raising money for the Toltec funds.
The SEC claims those facts were material omissions in his communications to investors, a key component of fraud.
“A reasonable investor would have wanted to know that the managing partner of the fund in which they were investing was lying,” the complaint reads.
The SEC alleges Mendia guaranteed investors fixed returns — another red flag of fraud — if they sunk money into his real estate funds. But the crowdfunder couldn’t deliver.
“Toltec Capital almost never had sufficient money in its bank accounts,” the SEC claims.
When investors asked when returns were coming, Mendia would peg delays on accounting problems and promise payments would arrive soon. In one instance, Mendia convinced two investors to extend their contract when he struggled to deliver. At the time, Toltec’s accounts had a negative balance, the SEC claims.
Meanwhile, Mendia had been plugging those shortfalls with funds from other investors, a glaring sign of a ponzi scheme.
In late 2022, when one investor wired $100,000 into a Toltec account with a negative balance, 25 payments were then made from the account to 18 investors, according to the complaint. The SEC alleges similar transactions took place throughout the year.
Investor funds also paid for Mendia’s rent and condo fees, plus a car and jewelry.
The fraudulent scheme is the latest to come to light in recent weeks.
In July, the SEC charged a Southern California investor with misappropriating funds raised to fix and flip homes. The investor had spent the money on a Mercedes-Benz, a Mexico vacation and paid off his home mortgage.
Last week, a Boca Raton couple was charged with diverting capital raised for real estate acquisitions, developments and renovations toward speculative options and future trading. The pair lost $12 million of investor money, according to the SEC.
And two Oregon investors are facing 21 counts of fraud after misleading investors in their residential real estate business as to how investments were being used. The partners bilked lenders and investors out of a combined $18 million, according to the indictment.
Read more
![SEC Brings Fraud Claims Against Wells Real Estate Investment](https://static.therealdeal.com/wp-content/uploads/2024/08/SEC-Brings-Fraud-Claims-Against-Wells-Real-Estate-Investment-f-150x106.jpg)
![](https://static.therealdeal.com/wp-content/uploads/2024/08/Hidden-in-Plain-sight-1-150x94.gif)
![Oregon Real Estate Investment Firm Indicted for Fraud](https://static.therealdeal.com/wp-content/uploads/2024/08/Oregon-Real-Estate-Investment-Firm-Indicted-for-Fraud-f-150x106.jpg)