Brion Randall Won’t Be Stealing Locals’ Hard-Earned Millions For the Next 15 Years

Based upon the handful of comments that just popped up on this 4-month-old Unfair Park item, some of his victims already know and have been celebrating the news: Brion Randall — the Plano man who, from 2004 through ’09, screwed some 30 folks out of around $6 million — is going to federal prison for 15 years, per the sentence handed down today by U.S. District Judge Reed O’Connor, who also tacked on three years of supervised released. Randall’s headed to prison at this very moment. And that, as they say, is that. Except for this pending headache before the Securities and Exchange Commission.

For those who don’t recall, and why would you, Randall pleaded guilty in May to a whole bunch of bad stuff, most of which involved getting people to invest in some “short-term loan participation programs” and other projects that didn’t exist. As in: He would tell people he was working on something for SMU or the Bush Library or Cowboys Stadium, ask ’em for money to finish the work — and then disappear with the dough. And those shenanigans followed his tenure at Merrill Lynch in ’02, which The Wall Street Journal documented and then some following allegations that he screwed with clients’ accounts. Jump for more. Don’t cost nothin’.

FORMER INVESTMENT ADVISOR SENTENCED
IN INVESTMENT FRAUD CASE

Brion Gary Randall Defrauded 30 Local Investors and
Caused More than $6 Million in Losses

DALLAS – Brion Gary Randall, 48, of Plano, Texas, was sentenced this
afternoon by U.S. District Judge Reed O’Connor to 15 years in federal
prison, to be followed by 3 years of supervised release, announced U.S.
Attorney James T. Jacks of the Northern District of Texas. He was
ordered into custody to begin serving his sentence immediately after the
sentencing hearing. In May 2010, Randall pleaded guilty to one count of
mail fraud and one count of bank fraud.

According to documents filed in the case, Randall worked as an
investment advisor from 2004 through July 2009. During part of that
time, he operated, and owned in part, 2Randall Consulting Group, LLP and
also owned part of Titan Home Theater, LLC, which designed and installed
commercial and residential audio/visual systems. According to a
complaint filed by the U.S. Securities and Exchange Commission against
Randall and 2Randall in August 2009, the Financial Industry Regulatory
Authority (FINRA) suspended and fined Randall for improperly exercising
discretion in customer accounts without prior written permission. That
case is currently pending.

From 2004 through July 2009, Randall raised more than $6 million
from 30 investors through a scheme in which he caused persons to invest
in a number of short-term loan participation programs, which in fact,
did not exist. He used investors’ funds for his own benefit and not for
purposes he represented.

For example, Randall represented that he was pooling money in
accounts at Chase Bank and AllianceBernstein for investment in a variety
of short-term loan participation programs. Randall represented that an
investor’s money in 2Randall Consulting’s account at Alliance and Chase
was held in a non-taxable escrow account and fully liquid, with the
investor able to withdraw his money at any time. He represented that
the 2Randall consulting account at AllianceBernstein had a balance
ranging from $25 million to $29 million, and that he had also invested
millions of dollars of his own money into the accounts.

In reality, however, the Chase Bank and AllianceBernstein
accounts were nonexistent. To further the scheme, Randall created and
distributed fraudulent documents to investors, including bogus Chase
Bank and AllianceBernstein account statements. He also created bogus
2Randall Consulting accounting statements and portfolio summaries. In
meetings with some investors, he would display a false and fictitious
computer screen shot of either the Chase Bank or AllianceBernstein
account which would show the investor’s money on deposit.

Randall also represented to investors that they could invest in
short-term loan participations, usually lasting 45 to 90 days and
returning a high rate of interest. He sold loan participation programs
in 1) Small Business Administration (SBA) loans; 2) Titan Home Theater
project completion loans; and 3) loans to acquire real estate in
Galveston, Texas.

For the SBA loans, Randall falsely represented to investors that
they could participate with 2Randall Consulting in a short-term loan to
a local company seeking an SBA loan. Randall represented that the
short-term loan would provide sufficient capital to enable the company
to obtain the loan at a discounted rate, and once the SBA loan closed,
the company would return to 2Randall Consulting and the participating
investors the principal plus 10 percent. He represented that the
companies receiving the loans were reputable local businesses, including
84 Lumber, General Packaging Corporation, PerotSystems Vent-A-Hood and
Richardson Bike Mart, businesses where Randall’s father had an
established relationship. Randall represented that participating in an
SBA loan participation program was low risk and that an investor could
only lose his money if the company declared bankruptcy during the 45-90
day term of the loan. Randall knew that no such SBA loan participation
agreements existed.

With regard to the Titan Home Theater project completion loans,
Randall represented that investors could participate in short-term loans
to Titan enabling it to complete a number of commercial projects, and
that upon completion of the projects, Titan would return the principal
plus up to a 22% return. Randall falsely represented that Titan was a
subcontractor on several commercial projects including projects at
Southern Methodist University, the Bush Library and the Dallas Cowboys
stadium.

Randall also represented to investors that they could
participate in short-term loans enabling him to finalize the acquisition
and sale of real estate in Galveston. Randall promised that on closing,
he would return the investor’s principal plus a sizeable rate of
interest.

As a further part of his fraud, Randall obtained loans from
financial institutions by submitting forged signatures and false and
fraudulent documents. The plea documents note that Randall obtained
five loans, from Bank of America, Texas Capital Bank and Wells Fargo,
that all defaulted, causing a total loss to these financial institutions
of nearly $875,000.

This case is part of President Barack Obama’s Financial Fraud
Enforcement Task Force (FFETF). President Obama established the
interagency FFETF to wage an aggressive, coordinated and proactive
effort to investigate and prosecute financial crimes. The task force
includes representatives from a broad range of federal agencies,
regulatory authorities, inspectors general, and state and local law
enforcement who, working together, bring to bear a powerful array of
criminal and civil enforcement resources. The task force is working to
improve efforts across the federal executive branch, and with state and
local partners, to investigate and prosecute significant financial
crimes, ensure just and effective punishment for those who perpetrate
financial crimes, combat discrimination in the lending and financial
markets and recover proceeds for victims of financial crimes.

The FBI and U.S. Postal Inspection Service investigated the
case. Assistant U.S. Attorney Christopher Stokes is in charge of the
prosecution.