Court orders Brogdon to pay more than $300,000
Christopher Brogdon, the nursing home operator found liable for a string of fraudulent bond deals, must repay almost $307,000 of ill-gotten gains owed by one of his companies toward the millions owed to investors under the monitorship plan already in place.
Judge Kevin McNulty handed down that order Wednesday in U.S. District Court in New Jersey, bringing the Securities and Exchange Commission case against Brogdon and his associates another step closer to a conclusion. According to the order, Brogdon must pay back $246,000 of profits and $60,793.75 in interest.
“Brogdon, shall satisfy this obligation by depositing $306,798.75 into the segregated accounts within 14 days after the entry of this final judgment,” McNulty wrote.
The new money ordered Wednesday comes from the SEC’s settlement with Brogdon Family LLC (BFLLC), a separate legal entity controlled by Brogdon. The order does not alter Brogdon’s obligation to pay back investors pursuant to his settlement, in which a court-appointed monitor has said investors are probably looking at losses of some $20 million.
All of BFLLC’s assets were already pledged to support the monitorship plan, so if investors are made whole under that plan the SEC will count the $306,798.75 as part of that amount.
Brogdon along with his family was charged by the Securities and Exchange Commission in 2015 with fraudulently raising $168 million from 54 conduit municipal bond deals and $22 million from private placements over 25 years, using the money for personal expenses and other business pursuits while the nursing homes they financed defaulted on the payments.
His activities also led to related SEC enforcement actions, including an ongoing action in New Jersey federal court against Todd Barker and Dwayne Edwards. That case, like the one against Brogdon, appears to be drawing to a close years after it was filed.
Brogdon’s effort to repay investors has been a matter of courtroom dispute in recent weeks. In 2016 a federal judge ordered Brogdon to submit a plan to repay bondholders in full, and Brogdon initially said he could achieve that by the end of 2017.
A quarterly report filed April 30 by court-appointed monitor Soneet Kapila painted an unflattering portrait of Brogdon as a reluctant participant in the repayment plan, allegedly dragging his feet on the sale of high-value assets including a $5 million home and a Beechcraft King Air 300 airplane valued at $1.5 million.
Brogdon’s attorneys disputed that characterization of their client in a May letter to the court, telling the judge that the monitor was oversimplifying and misrepresenting the situation. One property sale was halted by a tax lien issue, Brogdon’s team said, while another was in the midst of a negotiation.
Brogdon’s lawyers also accused the monitor of making “unfounded accusations” in his reports that Brogdon might be fabricating sale offers on his property just to stall the process.
The repayment plan is currently officially set to run through June 30, but could be extended again. In the event that the monitorship ends without Brogdon having paid the money ordered by McNulty, he would pay it directly to the SEC rather than into the accounts set up under the monitorship.