Investors of Greenville's Camperdown allege financing of project was Ponzi scheme, lawsuit
When visiting downtown Greenville, Camperdown is easily recognized. It is notable for bringing the 17-story Falls Tower to the city.
But now, four years after the project was completed in 2020, a lawsuit alleges that the financing behind it, operated by Greenville-based WCM Global Wealth and founded by Greenville resident Erik Weir, was a Ponzi scheme.
An elderly couple based in Lexington, Kenyon, and Cathy Wells, filed a lawsuit earlier this year in February alleging Weir and James Blair, who was employed by WCM and acted as its General Legal Counsel, “architected the financial scheme that ensnared the Plaintiffs and other investors.”
The Wellses, retired, decided to use Weir and WCM as their financial advisor in 2022, who then recommended investing in different real estate notes by sending them a presentation. The lawsuit claims individuals at WCM “were more focused on their own objectives than the Wellses’ objectives – they needed an infusion of money to prop up non-performing real estate investments under their management, and they needed it fast before their portfolio came crashing down.”
Attorneys representing the Wellses and WCM did not immediately respond to the Greenville News' request for comments on the lawsuit.
It also says that the presentation, included in the lawsuit, references “real estate notes and actual properties,” which allegedly “misled the Wellses into believing that WCM was going to use significant amounts of their money to make loans collateralized by real estate ventures,” which they claim was not true.
Between September 2022 and December 2022, Weir and WCM liquidated “many of the otherwise secure positions in the Welles’ portfolio to free up cash to ‘invest’ in a number of promissory notes.” Weir and WCM invested in several promissory notes to four entities, accumulating $2.6 million invested from Cathy and Kenyon Wells. The lawsuit alleges Weir advised the couple to invest in real estate properties he knew would not garner their investment back.
The lawsuit claims Weir and WCM knew the promissory notes were not backed by collateral and “represented payments into non-performing assets with little to no real prospect of repayment.” It also alleges that WCM sold promissory notes on the same over-leveraged assets under different names.
The lawsuit states, “No financial advisor thinking of the Wellses’ best interests and seeking to place them in investment vehicles consistent with their investment objectives would have recommended any of the promissory notes into which Weir and WCM placed the Wellses’ money.”
Not only did the retired couple invest in the Camperdown development, but they also invested in SCSOFII, managed by Weir, which is related to the Bowater Campus real estate project. The lawsuit claims that WCM “knew but failed to disclose that Camperdown was failing, that the financial collapse of the venture was likely, and the prospects for repayment on the new promissory notes was remote.”
The Bowater Campus real estate project, which was supposed to be the home of the new Greenville City Hall before plans fell through, currently has office space available for rent according to an online listing.
The lawsuit says, “Defendants should have told Plaintiffs not to invest the first dollar in SCSOF and that their investment would prove to be nothing more than a bandage on a financial hemorrhage, but Defendants did not tell them this and instead pushed Plaintiff’s money into this doomed venture.”
Weir’s lawyers did not file a response to the allegations but asked for the court to dismiss the lawsuit instead. Judge Alex Kinlaw Jr. will hear the motion in June.
Blair denied the allegations in a filing.
Savannah covers Greenville County politics and growth/development. Reach her at smoss@gannett.com or follow her on X @Savmoss.
This article originally appeared on Greenville News: Investors allege Camperdown plaza financing a Ponzi scheme in lawsuit
