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Pinaki Ghosh
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experience with Hughes Private Capital

Pinaki Ghosh
Posted Feb 27 2023, 04:22

I would like to know the experience of other people with Hughes Private Capital. In recent days I have been contacted by several investors and lawyers who claim to have a problem with Hughes Private Capital.

We do not have any NDA with Hughes Private Capital and we filed a lawsuit against them to get part of our principal back. Never received any interest after lawyer fees. Everything I am expressing here was part of a deposition where either Hughes Private capital owners or their CPA were engaged. During deposition they never refuted any of the facts that I mention here. We have proof of everything below. If you have similar experience, please contact my lawyer Noel Stout (Nstout at abdmlaw dot com) or Rich at NVlawyers dot com.

We invested in one of their funds (assuravest llc). We had to sue to get our money back. In the discovery process we found that most of the things they said were lies and they even misrepresented their experience credentials in the note world. Both the owners are uneducated in the finance world (one has a high school degree only). They used our principle to pay other investor's investment returns (which is very definition Ponzi scheme). They created a second fund using the same name and invested in similar instruments (non-performing notes). The notes they bought were not recorded in proper databases and they used 2 tabs of an excel document to track the 2 funds (how easy it is to cheat). While the fund was performing very poorly, they sent us statements every quarter regarding how our fund was growing as intended. When we asked for documents through court, they created a folder called (investor_name_waste of time). They gave away millions of our money to some note broker without getting much of the actual notes. So, the money was never put in any escrow account (which idiot would do so). The notes they received were never recorded anywhere other than excel documents.  They also mocked us by sending us a book called "how we sleep at night" etc. We have all the documents and proof in black and white. They paid themselves fat fees even though fund was losing money hand over fist. We were promised that we can withdraw any time after a certain period. When we asked for our money back they immediately halted all payments (or they said so). Does this ring a bell? That is when we decided to sue them. They settled with us just before the actual trial date. We did not get any interest, so it was a loss for us. The extra money we got went to lawyer and we had to pay some from our pocket. There were many many more inappropriate actions as related to financial transactions and record keeping

They also mixed funds by lending to other funds and then draining our principal in paying interest to themselves and other funds. If you decide to sue them, please include their CPA firm because this firm enables these 2 owners. The CPA firm knew about much of the fraud.  I hope at some point Nevada Securities Commission will look into this case because this is pure play ponzi. 

I can be reached through this website or pinaki at utexas dot edu. I will be more than happy to help anybody who may have questions about this company.

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Replied Apr 24 2023, 10:06
I see the Guardian Fund bankruptcy filing, but not the Hughes Private Capital filing. Does anybody know if it was filed as of yet? I hope it's safe to assume the Schedule K-1's will be sent out immediately after the bankruptcy filing. The inability to file my 2022 taxes is just adding to my frustration with this entangled costly mess. Thank you in advance, Noel Frenzel (substantial Vista Fund investor)

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Replied Apr 25 2023, 07:03
Quote from @Carlos Ptriawan:
Quote from @Jay Hinrichs:
Quote from @Robyn Shoaf:

By the way.... there are a couple hundred code violations filed back east (Missouri, Ohio) just for entertainment reading.  We physically flew back and stepped foot on 10 homes. We went to Detroit, Cleveland, St Louis, Birmingham.  These homes are what are "secured" by deeds to investors.  You would be horrified, as we were.  One of our homes even had a sticker on it "cannot be occupied" by the city.  Another home has foundation sliding and unstable so bad that it crushed the venting system and pulled the AC off foundation.  Support pillars teetering on an eroding pile of dirt!  A tenant in Ohio said he was offered reduced rent because 2 of the rooms in his home didn't have heat and he requested a work order on the portal. so instead of fixing it, they gave him reduced rent. (It's pretty dang cold in Ohio winter) and the AC doesn't work at all.  One home was in such a scary area we were afraid to get out of our car but did anyway.  The home had been empty for many months and there were bullet holes in the back. 3 homes out of 10 were occupied. One had been sitting for who knows how long,... siding mostly put up but just "stopped".  Windows broken, birds flying in and out.   Did you know that all real estate transactions were done remotely?  Electronic locks.  Tenant portal for potential renters.  Krch Realty didn't step foot and had no idea, (nor cared if they did) the conditions of any of the rentals or homes for sale..........  All the while Mr "I'm the King Hughes" was on video adamantly stating , "We do not sell homes to our investors unless they are renovated ("fixed up") and rented".   Is that so?!  I say no.  When asked about our homes and conditions, Aaron Noe and Greg Hughes said "that's the property management fault we aren't responsible"   Krch Realty was the "Property Management".  And who owns Krch Realty? Kyle Krch (aka owner with Hughes). HA !  Oh they "managed" the property alright... right into Krch funding, Hughes Capitol, Guardian, Hughberry, Personal, ...you get the picture. We invested in July 2022.  We flew out in February 2023.  Over 1600 homes are bragged by Hughes. If our little 10 homes had 3 occupied ( one is the one with the foundation issues!!!) can you imagine how many other situations are out there?         

Then,....those really looped in, could "refinance homes, put the money back into the fund, and be a part of an even bigger investment".  Hmmm. Who is the company that did this refinancing?  Oh... and who owns that one? What is their relationship to Hughes?   (Can't give all our info away)..... once again sticking finger into pie after pie mixing apples and cherries however they see fit. It's hysterical!  I know there are people out there much more savvy than me (especially my husband) and if I can see the stupidity, one begs the question "what on earth were you thinking?" ...the answer?   They aren't.

They should all fry.   When my husband asked him about his plane, stating he should sell it and give the money back to the investors that obviously paid for it, Greg said, "I work hard. I deserve to have things"...... and there you have it.

Websites are all down for all of them....hmmm....wonder what's up? :)

Doesn't matter if they file Chapter 11.  Go for it. Doesn't stop us in the smallest bit.  If investors would jump on board and provide their information, a judge can decline it. Or go to chapter 7 like was said earlier.  The more voice that gets out there the better.  Class action law suit... bring it on.  Meanwhile back at the Shoaf house, we will also be working on each individual and other companies involved.  We'd love the help since it's around $400/hour. But regardless .... we won't stop


You all got dragged into the hood.. this theme repeats itself quite a bit in those markets..  Just read the Clayton Morris saga here on BP.. different city it was Indy. These type of assets are not appropriate for this type of set up the ONLY investors that make these work are locals who do this for a living working collecting rent in the poorest neighborhoods of the US.

 a long time ago there were hundred of Class A/B SF syndication in FL, wondering the outcome today.


 I would like to know how to join a class action suit.  

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Victoire Van der Pas
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Victoire Van der Pas
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Replied May 11 2023, 02:10

I am a CPA and long time real estate investor. I was a HPC investor 2016-2021. I successfully sued Hughes Private Capital 2018-2021 and settled in 2021. I have done a financial analysis of their latest Hughberry fund. Please have a look at it, link below. It is bad. It also reveals where some of your savings went. I have also documented the questionable role of Mr. Aaron Noe in the Hughberry fund (who now oversees 12 Bridges and Guardian during bankruptcy). I do not believe Guardian will survive chapter 11 bankruptcy. I believe the plan is to first wipe out investors and then shut down as soon as possible. 

NV SEC has opened a criminal case on Guardian and HPC. If you are a victim in any of their funds, please contact the NV SEC with your story. They are conducting interviews and collecting evidence. Do it now. Strength is in numbers. Government has to step in. Once companies are shut down/bankrupted, it may be too late to find out where the money was transferred to. No point going after the remaining "assets" in the investor funds. 

https://www.biggerpockets.com/...

https://www.nvsos.gov/sos/inve...

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Replied May 12 2023, 14:38
Quote from @Robyn Shoaf:

EVERYONE,

We have filed suit not only against Hughes Private Capital, but with all individuals and companies involved. KrchRealty right there too. The mortgage platform/company is "them" also. All have been served. They have co-mingled funds in every direction piercing their corporate veil from one end to the other. This alone exposes them from the protection of behind the title of "LLC" or "CORP" however it's the tip of the iceberg. They have lied, defrauded, misrepresented, and deceived. We personally went to our homes, and our partners homes, and have been horrified at the conditions they "guaranteed". My husband has met personally with the very arrogant Mr Noe and has communicated through multiple emails with Greg Hughes. Side note: Mr Hughes bought a plane and is updating his passport...hmmm...what does that tell you???

We also have notified the SEC and attorney general(s) in multiple states.

My husband was interviewed today with the Wallstreet Journal. (They contacted him). We have reached out to every news station and radio station.

My husband knows corporate laws, and regulations inside and out and says "this goes back to the playbook of Madoff"...only they aren't nearly as smart. 

Come join in.  We are going after them all. Numbers are in our favor people!  Jump on board

 Hi Robyn 

How can I jump on board?  They have over a million dollars of my hard earned retirement savings and up until the last minute were willing to take another $350,000.  I want my money back and I want them in jail.  Are you talking about a class action suit?  Not sure if anything will be sucessful since they filed Chapter 7. And I just got paperwork filed by their attornies asking the bankrutcy court to approve sale of their office building in Ohio. What happens with this money ($610,000 minus costs)?  I don't believe they can decide who that money goes to.  

Or should I get my own attorney and sue?  I think a class action would be better but I don't know. Or do we rely on the court and the attorney general?  

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Victoire Van der Pas
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Victoire Van der Pas
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Replied May 13 2023, 01:54

You all may want to have a virtual look around in these two luxury vacation homes in Scottsdale, AZ. Purchased for $4,610,000 cash in February 2022 by an LLC that Greg Hughes manages. Btw, these properties are NOT owned by any of the HPC investor funds.

Greg Hughes Vacation homes


Owner of record: Polo Estates Manufactured Home Community, LLC, an entity registered on 3/1/2018 in South Carolina. Managed by Greg Hughes of Reno, NV

Note: this video was a deleted YouTube video originally uploaded by HPC that I recovered.   

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Replied May 13 2023, 07:38
Quote from @Victoire Van der Pas:

You all may want to have a virtual look around in these two luxury vacation homes in Scottsdale, AZ. Purchased for $4,610,000 cash in February 2022 by an LLC that Greg Hughes manages. Btw, these properties are NOT owned by any of the HPC investor funds.

Greg Hughes Vacation homes


Owner of record: Polo Estates Manufactured Home Community, LLC, an entity registered on 3/1/2018 in South Carolina. Managed by Greg Hughes of Reno, NV

Note: this video was a deleted YouTube video originally uploaded by HPC that I recovered.   


 I know they're Ponzi because they want to  sell me a $35K house in flood zone for $100K. So in theory I buy my own 8% dividend yield from my own money from nothing LOL, it is just imposible one could produce sustainable 8% from rental alone.

When I ask this fact they're so upset LOL.....

this is why, sorry to say, investing in public entity is still safer in general than buying private syndication/fund like this because there're too many area where the accounting book can be cooked/manipulated.

If we see Bezos's new SFR venture, we can see that their return is not guaranteed and their yield is only between 3.5-4% , which is about correct.

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Victoire Van der Pas
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Victoire Van der Pas
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Replied May 15 2023, 01:23

HPC BANKRUPTCY

The latest development is that Hughes Private Capital filed chapter 7 on 12 May. This was initiated by investors. HPC had plans to file bankruptcy (probably chapter 11) but they were beaten to it. 

Last month they converted both HPC and 12 Bridges from LLC to Inc. HPC created a myriad of new LLC/Inc's in the last few years. I have a pretty good grip of most of the NV entities as I had to dig into HPC and their books for 3 years when I successfully sued them. I have followed them for 7 years now.

Many of the entities are titled similarly to confuse, deceive and comingle. The different entities are not operated as separate entities. Investor money flows freely between different entities and their personal bank accounts. Not a great idea when you go down in bankruptcy.

FILE A SEC COMPLAINT

If you have not done so, please file a complaint with the Nevada SEC. The criminal investigator is in communication with the victims who filed. I understand that many of you have lost almost everything. Don't put it off. 

https://www.nvsos.gov/sos/inve...

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Replied May 16 2023, 13:15

Why/How is Hughes Private Capital, LLC the registered agent of 12B Residential?

Also, Hughes Private Capital, LLC is supposedly no longer in business. Hughes Private Capital, Inc was established on March 13, 2023. Contacts are Greg Hughes, Kyle Krch, and Steve Sixberry.

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Alex I.
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Replied May 16 2023, 14:19

12 bridges is rehab/construction for hpc. 

12b residential is solely owned by guardian fund. It does the prop mamagement.

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Victoire Van der Pas
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Victoire Van der Pas
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Replied May 16 2023, 14:27
Quote from @Sharon Hoefling:

Why/How is Hughes Private Capital, LLC the registered agent of 12B Residential?

Also, Hughes Private Capital, LLC is supposedly no longer in business. Hughes Private Capital, Inc was established on March 13, 2023. Contacts are Greg Hughes, Kyle Krch, and Steve Sixberry.

12B Residential was formed on 2/17/23.
The registered agent of 12B Residential Inc is Hoy Chrissinger Kimmel Vallas PC.
Officers are Aaron Noe et al.

12 Bridges Inc was formed on 3/14/23 when it was converted from 12 Bridges Inc.
The registered agent of 12 Bridges Inc is Hughes Private Capital.
Officers are Hughes, Sixberry and Krch.

Hughes Private Capital Inc was formed 3/13/23 when it was converted from Hughes Private Capital LLC (which was formed 1/29/09).
Ownership percentages (in 2021): Greg Hughes (52%), Krch (30%), Sixberry (18%) 


It is easy to confuse 12 B Residential with 12 Bridges. They are named so similar on purpose. HPC does it all the time. They have created several new entities recently and then they have the LLC to Inc conversions.


 

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Victoire Van der Pas
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Victoire Van der Pas
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Replied May 17 2023, 08:27

Big red flags from the Q1 investor update and the Guardian bankruptcy meeting that nobody seems to be paying attention to.

As per the Q1 investor update, Mr Noe said that they have completed properties that needed up to $5K in repairs. They have moved onto repairing properties that need $5-10K. Once that is done, they will move onto properties that need even more money. Mr. Noe said additional capital is needed to work the properties. Since the fund has no money, where do you think this money is coming from? Exactly: investors

Mr. Noe said in the bankruptcy meeting that he wants the court to allow him to amend the master lease agreement. Guardian currently pays for improvements per the lease agreement. This is obviously getting very expensive because properties are in shambles. Many need a complete overhaul to make them habitable.

Two problems arise if investors become responsible for the cost of improvements.

First problem: the 2% return for the lease may not cover the cost of these improvements. Example: a 2% return on a $100K investment is $2,000 per year. However, a $100K dilapidated house can easily cost $20-30K to fix. Sounds like investors would be on the hook for that. What is the point of getting $2K if you have to fork over $20-30K in the form of capital calls in return?

Second problem: why would the fund repair houses if the investor pays for the improvements? For example, an older roof might last another 5-10 years with a $500 repair. Guardian investors do not have to pay for repairs. However, under an amended lease agreement, investors would have to pay for a new $5K roof. Why would the fund repair it?

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Replied May 17 2023, 08:49
Quote from @Victoire Van der Pas:

Big red flags from the Q1 investor update and the Guardian bankruptcy meeting that nobody seems to be paying attention to.

As per the Q1 investor update, Mr Noe said that they have completed properties that needed up to $5K in repairs. They have moved onto repairing properties that need $5-10K. Once that is done, they will move onto properties that need even more money. Mr. Noe said additional capital is needed to work the properties. Since the fund has no money, where do you think this money is coming from? Exactly: investors

Mr. Noe said in the bankruptcy meeting that he wants the court to allow him to amend the master lease agreement. Guardian currently pays for improvements per the lease agreement. This is obviously getting very expensive because properties are in shambles. Many need a complete overhaul to make them habitable.

Two problems arise if investors become responsible for the cost of improvements.

First problem: the 2% return for the lease may not cover the cost of these improvements. Example: a 2% return on a $100K investment is $2,000 per year. However, a $100K dilapidated house can easily cost $20-30K to fix. Sounds like investors would be on the hook for that. What is the point of getting $2K if you have to fork over $20-30K in the form of capital calls in return?

Second problem: why would the fund repair houses if the investor pays for the improvements? For example, an older roof might last another 5-10 years with a $500 repair. Guardian investors do not have to pay for repairs. However, under an amended lease agreement, investors would have to pay for a new $5K roof. Why would the fund repair it?


 This is at the very beginning of my DD process with them, this whole Greg idea thing to invest D class home and return 8% annualy does not make sense because the drawback of cheap property is expensive repair. The way they can survive all these years is by ponzi, delaying maintenance and marking up properties 300% from appraisal. 

These are just bad ponzi and bad real estate scenario from beginning.

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Replied May 17 2023, 09:31

I missed the meeting due to work.  Does anyone know how to get a recording or transcript of the 341 meeting?

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Victoire Van der Pas
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Victoire Van der Pas
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Replied May 17 2023, 12:18
Quote from @Sharon Hoefling:

I missed the meeting due to work.  Does anyone know how to get a recording or transcript of the 341 meeting?

 Send an email to edward.m.mcdonald[at]usdoj.gov

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Replied May 18 2023, 08:28

Has anyone filed a complaint in Ohio?  I started one but and I am not sure how to answer some of their questions.  It seems to be specific to Ohio companies, as expected, but do I file against Hughes Private Capitol or Kych Realty or ???  Just wondering what others did.

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Replied May 18 2023, 09:24
Quote from @Sharon Hoefling:

Has anyone filed a complaint in Ohio?  I started one but and I am not sure how to answer some of their questions.  It seems to be specific to Ohio companies, as expected, but do I file against Hughes Private Capitol or Kych Realty or ???  Just wondering what others did.


 I have the same intent, but am waiting for photos inside and out, of my three properties (taken for me by a friendly Rele Estate agent in Cleveland).  

I'll mention the whole gang of Hughes crooks, especially Guardian, who sold the house to me and is leasing it from me (doing business in Ohio).  Yes, Guardian is now a "new" company, but that doesn't erase their frauds (although Hughes Private Capital, who owned them, will have to pay.)

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Replied May 18 2023, 11:25
Quote from @Jay Hinrichs:

You all got dragged into the hood.. this theme repeats itself quite a bit in those markets..  Just read the Clayton Morris saga here on BP.. different city it was Indy. These type of assets are not appropriate for this type of set up the ONLY investors that make these work are locals who do this for a living working collecting rent in the poorest neighborhoods of the US.

You should check out Natali Morris' Instagram account.  Recent visits to Egypt, Antigua, Austria and the Canary Islands, skiing in the Alps, and livin' the life in Portugal. 

The former Fox & Friends host and his wife hightailed it to Portugal once the lawsuits started.  Their ill-gotten gains go a lot further there.  (It's a beautiful country with wonderful people.  I feel bad for the natives.)

They have no shame.

https://www.instagram.com/nata...




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Victoire Van der Pas
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Victoire Van der Pas
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Replied May 26 2023, 15:21

Frank Mullen from the Reno News & Review did an excellent article on Hughes Private Capital. Just released today. Features me and several other investors. Very comprehensive, have a look:

https://renonr.com/2023/05/26/...

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Replied May 27 2023, 16:07

Curious - does anyone know who the CPA firm was?

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Pinaki Ghosh
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Pinaki Ghosh
Replied May 27 2023, 16:40
Quote from @Brent Forbush:

Curious - does anyone know who the CPA firm was?

it used to be this company - don't know now
Evans Nelson & Company CPAs – Reno NV Accountants (encpas.com)

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Replied May 27 2023, 16:41
Quote from @Pinaki Ghosh:
Quote from @Brent Forbush:

Curious - does anyone know who the CPA firm was?

it used to be this company - don't know now
Evans Nelson & Company CPAs – Reno NV Accountants (encpas.com)

Ah thanks.  Had a couple clients invest in the last 2 years - i am mad and heart broken for them.

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Replied Jun 1 2023, 07:15

Hi Everyone, 
Guardian "secured investor" here.  Sounds like I'm in a similar scenario as many of you.  I invested with HPC back in 2019 via a 1031 exchange.  In order to satisfy the 1031 exchange Hughes had me sign a promissory note for an "internal loan" and I was sold 4 properties that I now know are worth nowhere near what they sold them to me for.  Keep in mind this loan existed solely on paper, they just used it to sell me the over-inflated properties. The silver lining here is that Guardian never filed a deed of trust on these properties, so I'm able to sell the houses unencumbered and recoup a good chunk of my principle.  My only worry is now is if the BK estate comes after the internal loan, will I be able to fight it?  The houses are in such horrible shape that they're not worth what I paid for them back in 2019 (They were never worth what I paid for them).  There is not enough value in these properties to pay back my principle and satisfy the internal loan.    

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Replied Jun 1 2023, 08:09

What can I include in my Proof of Claim?  Does anyone know if you can include all costs associated with repairing/renovating/other expenses that was promised but not performed by HPC/12 Bridges/Home Partners regarding the homes in the Secured Portfolio?  What about eviction costs?  What about legal costs?

Has anybody used a lawyer to help file this Proof of Claim?  If so, can you give me their contact info?

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Replied Jun 5 2023, 17:02

I just received a request for info on my investments with HPC from Dean DiMaio.  He claims to be with the Sec of State NV office.  I can't find any info on him online, including the official SOS website.  Also, the email is odd in that it's addressed only to me and not me and my husband.  We did file a complaint with this office but something seems off.  Has anyone else been contacted by this person?  I will call the SOS tomorrow to confirm he is legit. Thanks, Sharon

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Alex I.
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Replied Jun 5 2023, 17:05

He is legit. He is handling the hpc case for state of nevada.