The Colorado Division of Securities is pursuing legal action against a man whom it claims deceived investors and used the ownership of federally supported low-income housing projects to line his own pockets.
Securities Commissioner Tung Chan announced its civil court filings against Michael Dale Graham, 68, on Nov. 12.
Chan’s office filed civil fraud charges against Graham, and also asked for a temporary restraining order and freezing of Graham’s assets and his companies’. A Denver district court judge immediately granted both. Since then, two court dates to review the those orders have canceled; a third is scheduled for mid-January.
Graham operates Sebastian Partners LLC, Sebastiane Partners LLC, and Gravitas Qualified Opportunity Zone Fund I LLC (“GQOZF”), all of which were controlled by Graham during his “elaborate real estate investment scheme,” as described by the securities office in a case document.
The filing states Graham collected more than $1.1 million from eight investors to purchase three adjacent homes in Aurora. The Denver-based Gravitas fund and its investors purportedly qualified for the federal Qualified Opportunity Zone (QOZ) program with the homes. Qualified Opportunity Zones were created by the Tax Cuts and Jobs Act passed by Congress in 2017. The zones encouraged growth in low-income communities by offering tax benefits to investors, namely reductions in capital gains taxes on developed properties.