San Francisco-based fund pursues legal action against Texas-based Noble Capital alleging “unlawful enterprise scheme” designed to defraud private investment fund.
NOBLE CAPITAL TEXAS REAL ESTATE INCOME FUND, LP, SAN FRANCISCO, JULY 2022 – San Francisco-based investment fund manager US Capital Global Investment Management, LLC (“US Capital”) and Noble Capital Texas Real Estate Income Fund, LP (the “Fund”) have filed lawsuits against Noble Capital Fund Management, LLC and Noble Capital Group, LLC
(“Noble Capital”) in the State of Texas for over $100 million. The lawsuits allege that Noble Capital engaged in fraudulent misconduct, malicious prosecution, abuse of process, breach of contract, and conversion.
The defendants, Noble Capital Fund Management, LLC (“NCFM”) and Noble Capital Group, LLC (“Noble Capital”), are limited liability companies with their principal place of business located in Austin, Texas. Noble Capital Group is the parent entity to Noble Capital Fund Management. Mentioned in the allegations of fraudulent misconduct are Chris Ragland, during his tenure as COO of NCFM and a member of Noble Capital, Jadon Newman, Founder and CEO of Noble Capital, and Grady Collins, Partner and Chief Investment Officer at Noble Capital.
According to the allegations in the lawsuits, in 2018 US Capital caught Noble Capital grossly mismanaging its servicing duties for the Fund, a private investment vehicle offering business purpose real estate loans to developers and construction companies in Texas. Noble Capital allegedly furnished false and misleading credit memoranda to the Fund to induce it to make loans with an unacceptable risk of default, and when its misdeeds were uncovered, it converted all of the Fund’s assets (over $25 million).According to the complaint filed on June 28th
, this alleged pattern of fraud resulted in losses for the Fund even prior to the conversion and simultaneous gains for the Noble Capital enterprise and formed part of an “overarching plan” to defraud the Fund into taking on bad debt from other Noble-controlled entities. The unlawful enterprise scheme, the lawsuit alleges, was part of a modus operandi dating back nearly a decade by which Noble Capital has shifted bad loans among their various entities, enabling them “to extract additional money from their scheme from a wider pool of individuals over a lengthy timeframe.”
The lawsuit further alleges that Noble Capital published defamatory accusations against US Capital and pursued a strategy of malicious prosecution to coerce US Capital to turn a blind eye to Noble Capital’s mismanagement and provide them unfettered control of the Fund. In September 2019, Noble Capital is alleged to have unlawfully raided and caused the transfer of all of the Fund’s assets, through its servicing arms, away from the Fund into other investment vehicles solely owned and controlled by Noble Capital, without any notice to the Fund or any right to do so.
US Capital and the Fund have filed lawsuits with the District Court in Austin, Texas, seeking full compensation for all losses incurred, as well as special damages and punitive damages.About Noble Capital Texas Real Estate Income Fund, LP
Noble Capital Texas Real Estate Income Fund, LP (the “Fund”) is a private investment fund that offers business purpose loans to developers and construction companies operating in Texas to acquire, renovate, and sell or refinance homes. US Capital Investment Management, LLC is the General Partner of the Fund. Noble Capital Fund Management (“NCFM”) was appointed the Manager of the Fund, responsible for managing the investment performance of the Fund in return for an advisory fee. NCFM’s management duties included originating Texas real estate investment opportunities, conducting due diligence of those opportunities, and managing the investment portfolio of the Fund for the Fund’s best interest.
This press release has been prepared and is being distributed by Noble Capital Texas Real Estate Income Fund, LP.
Counsel for US Capital Global Investment Management, LLC: Murray Hudson LLC, 5550 Glades Rd, Suite 635, Boca Raton, FL 33431, Tel. +1 561-549-9109.
Counsel for Noble Capital Texas Real Estate Income Fund, LP: Joseph A. Garnett at Sheehy, Ware, Pappas & Grubbs, P.C., 909 Fannin Street, Suite 2500, Houston, TX 77010, Tel. +1 713-951-1016.