On October 28, 2016, Carlton Cabot, the former owner and chief executive officer of Cabot Investment Properties LLC (“CIP”) was sentenced in the Southern District of New York to 10 years in prison and ordered to pay $17 million in restitution and forfeiture for defrauding investors through CIP real estate investments.  Between 2003 and 2012, CIP offered 18 separate tenants-in-common (“TIC”) securities offerings to investors in the United States.  Investors in each security were entitled to a share of rental income from a commercial real estate property.  Despite representing that CIP would only retain rental income in excess of its obligated disbursements to investors, Cabot repeatedly transferred money out of TIC bank accounts into CIP bank accounts that he controlled in order to use the funds for unauthorized purposes including millions of dollars in personal expenses, operating expenses and investor distributions for other TIC investments, and CIP business expenses, including a $1,125,651 civil settlement with TIC investors who had sued Cabot and others.  Cabot and his co-defendant Timothy J. Kroll, CIP’s chief operating officer, provided false and misleading financial reports to hide the misappropriation of investor money.  On October 7, 2015, Kroll pled guilty for his role in the scheme. DOJ Press Release

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