Update 2/20/18 – The U.S. attorney for the Southern District of Florida has filed liens to seize two residences and three self-storage properties tied to the Touizer fraud case. The storage facilities in Margate and Pembroke Pines are under construction, while the third project in Miami has been approved for building, according to the source.
The Margate facility at 5400 N.W. 31st St. was expected to comprise 133,872 rentable square feet. The Pembroke Pines project at 2801 John P. Lyons Lane was slated to be 42,991 square feet. The Miami development at 2915 N.W. 36th St. was approved at 50,625 square feet. Both residential properties comprise more than 3,000 square feet. There are in Aventura and Boyton Beach, Fla.
An amendment to the Touizer indictment filed on Nov. 21 charges co-defendants John Kevin Reech and Saul Daniel Suster with mail fraud, the source reported.
11/1/17 – The arraignment for Touizer, accused of investment fraud on three Florida self-storage developments and other business dealings, has been rescheduled for Nov. 15.
Though it’s unclear how much money Touizer raised for the storage projects or how many investors may be involved, two of the three developments received construction financing from ORIX RE Holdings LLC, a division of ORIX USA, a Dallas-based commercial real estate finance, asset management and investment firm, according to “SpareFoot Storage Beat,” an industry blog. Kaufman Lynn Construction, a commercial construction company based in Boca Raton, Fla., was tapped as the builder on those projects.
The loan for the facility planned for Margate was $11.3 million. The other projects are in Miami-Dade County and Pembroke Park.
Per the federal affidavit, Touizer was CEO of four different investment companies implicated in the fraud case. In addition to Wheat Capital, the case involves Cinergy, an insurance agency that operated from 2005 to 2016; Investment Diamonds (2011-2014) and Infinity (2013-2016), another insurance agency that did business as Covida, the blog reported.
Former Wheat Capital CEO Gary Delaney told the source Touizer fired him after he uncovered some suspicious financial dealings and still owes him $125,000 due to breach of contract. Delaney became concerned that Touizer was spending too much time raising capital from investors rather than securing financing. “I was spending the better part of 50 percent of my time with consultants and outside contractors,” he told the blog. “I was starting to question balance sheets. It wasn’t long after that he terminated my agreement.”
Law firm Peiffer Rosca Wolf Abdullah Carr & Kane LLP, which specializes in investment-fraud cases, has stepped forward to represent investors who believe they’ve lost money in connection to Touizer, though these types of cases typically produce little in the way of restitution or financial recovery for victims, according to attorney James P. Booker.
“We’re investigating claims we may be able to write on behalf of investors and anyone who may have been part of the alleged fraud,” Booker told the source.
9/27/17 – Daniel Joseph Touizer, founder and chair of Fort Lauderdale, Fla.-based private-equity firm Wheat Capital Management LLC, has been arrested on charges of investment fraud, allegedly swindling $19 million from 150 people over 12 years. He’s accused of misleading investors to buy shares of stock and/or debt in companies dealing in gems, insurance products and self-storage development between January 2005 and September 2017, according to federal prosecutors.
Touizer allegedly guaranteed investment returns, while also claiming his companies had regulatory approval and declaring he didn’t take a personal salary. Investors understood their money would be used for sales and marketing, according to a federal affidavit. “In reality, the large majority of investor funds raised by Touizer were misappropriated by him for his co-conspirators’ personal use, and to further their fraud scheme,” the document said.
Of the $19 million allegedly defrauded, $660,000 in cash was withdrawn after the FBI seized records in August from Touizer’s offices, according to the source. Touizer’s attorneys argued the businessman transferred the money into another account to shield it from other people who previously had access to it.
Touizer appeared before U.S. Magistrate Judge Barry Seltzer in U.S. District Court in Fort Lauderdale, Fla., this week. Seltzer characterized the entrepreneur as a “serial fraudster” and a “significant economic danger to the community,” the source reported. He determined Touizer to be a flight risk and ordered him to be held without bail. The businessman faces up to 17.5 years in federal prison.
Wheat Capital’s website lists self-storage developments in Margate, Miami and Pembroke Park, Fla., comprising nearly 300,000 net rentable square feet. Two of the three projects have broken ground and are expected to be complete in 2018. All three are under investigation, according to the source. In addition to Florida, the company website lists Chicago, Los Angeles, New York City and San Diego as targets for storage development.
Founded in 2015, Wheat Capital specializes in the acquisition and development of urban-infill storage facilities. It has “forged exclusive partnerships with well-established self-storage real estate investment trusts, such as CubeSmart and Extra Space Storage, to serve as third-party property managers who will oversee all aspects of the day-to-day operations of the self-storage properties,” according to the website.
Touizer’s Wheat Capital bio says he is a “seasoned entrepreneur with over 20 years of experience in creating several multi-million-dollar startup companies within the insurance, travel, computer and alternative-investment industries.” The federal affidavit indicates he also headed a company that marketed and distributed “rare and valuable colored gems,” the source reported.
Touizer apparently solicited money from possible investors as recently as last week, Seltzer wrote in a detention order. His arraignment is scheduled for Oct. 25.
The Real Deal, Feds Will Seize 5 South Florida Properties From CEO Indicted on Fraud Charges
SpareFoot Storage Beat, Arraignment Delayed for Alleged Self-Storage Fraudster
Sun Sentinel, CEO Jailed in Alleged $19M Investor Fraud as Judge Calls Him 'Economic Danger'
Wheat Capital Management, Website