SMK capital management

[Jayson Tripp]

Anybody invest with these guys.  They had an ATM fund that looked interesting, but I couldn't find anyone talking about them online. 

[Adam Jernow]

Quote from @Erica Leigh:

Yes, I invested with them. The ATM fund was a Ponzi scheme perpetuated by Daryl Heller of Pennsylvania, who is under investigation by the FBI and SEC and has been charged by the SEC for running a 770 million dollar Ponzi scheme.  That will be a significant capital loss for me, only mitigated slightly by the fact that I was a year in when the fraud was discovered. Anyone who had just invested would have lost everything. I don’t blame SMK for that loss, as the fraudulent scheme was apparently highly sophisticated. Due diligence cannot necessarily protect against that kind of fraud. 
However, I have multi family investments with them as well. One has zero cash flow and I expect it to be an eventual (large) capital loss due, in my opinion, to mismanagement and poor due diligence. The other property cash flows at 2% annually which is very low compared to projections. I don’t hold much hope for that property either. Of note, through a different sponsor, I have a multi family investment located in the same city as the failed property and it is doing fairly well. The contrast between SMK and the other sponsor in deal making, due diligence, and property management (which SMK delegates to operating “partners,”) is striking. 

I won’t invest further with them and will be surprised if I ultimately retain more than half of my invested capital. These are my thoughts based on the specifics of my situation with SMK. 

 They're syndicators.  Good marketing.  My best deals have been with lousy marketers/great operators.