On December 2nd, 2021

California Man Arraigned in Fraudulent Real Estate Investment Scheme A California DOJ and Department of Financial Protection and Innovation investigation

“Investigations into fraudulent financial investment schemes such as this can be very lengthy and complex.  California employs agents and investigators to protect people from this kind of financial harm and to bring to justice those who swindle away the hard-earned money of others.” – CSLEA President Alan Barcelona

OAKLAND – On November 29, 2021, Tracy Emery Smith, 40, the owner of Downkicker, Inc., was indicted and arraigned for allegedly running a fraudulent real estate investment scheme, according to the California Attorney General’s Office. As a result of the alleged 13-month scam, seven victims lost more than $1.3 million.

On October 29, 2021, a special statewide criminal grand jury indicted Smith on 38 counts, including:

  • one count of operating a fraudulent securities scheme,
  • 19 counts of securities fraud,
  • 17 counts of grand theft,
  • and one count of elder abuse.

He was arraigned in San Diego County Superior Court.

“Investing may involve various risks, but being swindled by unqualified individuals should not be one of them,” said Attorney General Bonta, “We are grateful today to the DOJ’s Bureau of Investigation and Department of Financial Protection and Innovation, as well as the United States Attorney’s Office for the Eastern District of California, and the Santa Clara District Attorney’s Office for their assistance and continued partnership.”

An investigation by the California Department of Financial Protection and Innovation found that Smith, through Downkicker, allegedly offered his private clients an opportunity to invest in various real estate projects. During this time, he is alleged to have presented himself as a successful investor and contractor, but failed to disclose to his victims, facts that his investors had a right to know — including, that both he and the companies owned and run by him had gone bankrupt, that he had been successfully sued multiple times, that both the Internal Revenue Service and California Franchise Tax Board had issued liens against him for failure to pay taxes, and that his contractor’s license had expired in 2008.

Instead of investing his victims’ funds according to the terms of the investment contracts, Smith allegedly, in many instances, took his victims’ money and walked away from the projects. The defendant is also accused of abandoning multiple projects, resulting in the foreclosure of those properties. As a result of his alleged fraud, the defendant’s seven victims lost $1,363,809.80.

DOJ’s Special Prosecutions Section will handle the prosecution.

A copy of the indictment is available here.

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