A San Bernardino County, Calif.-based accountant and his affiliated firms, including a wealth management business, have been charged by the Securities and Exchange Commission with defrauding clients and breaching fiduciary duties in the sale of limited partnerships, primarily invested in real estate.
Charles P. Copeland, founder and co-owner of the investment advisory firm Copeland Wealth Management and a real estate business, CWM Real Estate Corporation, allegedly defrauded clients by misrepresenting investments to clients and failing to disclose conflicts of interest, among other information.
Without admitting or denying any allegations, Copeland agreed to stop violating SEC regulations, agreed to the appointment of a receiver over the two entities and agreed to not destroy any documents.
Copeland, through his accounting business, recruited people to become clients of the investment advisory firm, as well and to invest in limited partnerships operated by the CWM Real Estate Corporation, the SEC says. Approximately 100 people invested $65 million in the limited partnerships.
The funds were being used for things other than investments in real estate and corporate loans, which had been the agreement. Some funds were invested in what were supposed to be guaranteed fixed income funds when in fact approximately $14 million raised this way was lent to companies or individuals affiliated with Copeland, some of which were insolvent and unable to pay back the loans.
In addition, Copeland allegedly failed to disclose conflicts of interest created when the money was being loaned to companies he was affiliated with and he transferred money from the real estate partnerships to the CWM investment advisor firm without approval. He also failed to disclose commissions he was receiving for the purchase and sale of real estate.