Joshua Burrell, Securities Fraud, New York 2023

Joshua Burrell, a Manhattan real estate fund manager, has been charged with securities fraud, wire fraud, and aggravated identity theft in connection with his operation of a New York-based investment firm, Activated Capital, LLC.

According to the allegations contained in the Indictment, Burrell sought to obtain tens of millions of dollars of investments for the Activated Tax Advantaged Opportunity Fund, LLC, and Activated Capital Opportunity Zone Fund II, LLC (collectively, the “Activated OZ Funds” or the “Funds”) based on fraudulent representations.

Burrell represented, in substance, that the money invested in the Activated OZ Funds would be used to purchase real estate properties in Opportunity Zones and that investors would receive distribution payments out of the Funds’ net real estate investment income.

However, contrary to those representations, Burrell caused the Activated OZ Funds to pay putative distributions in amounts greater than the Funds’ net income. From the inception of the Funds in 2019 through approximately February 2021, Burrell used investor money to help pay distributions totaling approximately $470,000 in a manner akin to a Ponzi scheme.

Burrell also falsely inflated Activate Capital’s assets under management in communications with prospective investors.

To attract additional investment capital for the Activated OZ Funds, Burrell sought to establish a partnership with an investment bank headquartered in Manhattan (“Company-1”).

As part of Company-1’s diligence process, Company-1 asked Burrell for “[b]acking to show current fund proceeds/acquisitions made.”

Burrell fabricated documents to make it appear that the Activated OZ Funds were more successful, owned more properties, and were in better financial condition than was actually the case.

U.S. Attorney Damian Williams said, “As alleged, Joshua Burrell solicited investors through a series of lies. While promising investors transparency, he doctored documents and falsely depicted his firm’s finances. Now, Burrell faces prosecution for his alleged crimes.”

USPIS Inspector-in-Charge Philip R. Bartlett said, “Mr. Burrell’s scheme is unfortunately not an uncommon scam in the investment community. Investors must always check and double check any firm or individual promising guaranteed positive returns to ensure they will not be taken for a ride. It is a good practice for all investors to trust their gut. If it doesn’t seem right, walk away.”

Burrell was arrested this morning in Richmond Heights, Missouri, and is expected to be presented tomorrow before United States Magistrate Judge John Bodenhausen in St. Louis federal court.

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