On September 11, 2017, the Commission filed a Complaint against Christopher A. Faulkner (“Faulkner”), Homes Inc. (“Homes”), HOMESINC Renaissance, LLC (“HR LLC”), Matthew Rapoport (“Rapoport”), and Earl Nelson Davenport (“Davenport”) (collectively, the “Defendants”). The Commission alleged that, since the fall of 2016, Faulkner, Rapoport, and others under their direction duped investors into purportedly funding real estate projects. Among other things, they misrepresented that Homes (a) had a proven and extensive track record of offering and selling passive real estate investments to investors; (b) used investor funds for the acquisition, renovation, and re-sale of residential real estate in Southern California; and (c) consistently produced double digit returns to its investors. The Commission further alleged that Faulkner and Rapoport touted these misrepresentations in marketing materials about Homes’ unregistered securities offering, HR LLC, and hired Davenport to lead sales efforts to telephonically solicit investments in HR LLC from investors across the country. The Commission alleged that, since March 2017, Homes raised at least $168,750 as part of the unregistered offering of HR LLC, and that none of the investor funds had been used for real estate transactions and activities. The Commission charged the Defendants with violations of the antifraud provisions of the Securities Act of 1933 (the “Securities Act”), 15 U.S.C. § 77a et seq., and the Securities Exchange Act of 1934, 15 U.S.C. § 78a et seq., as well as registration violations under Section 5 of the Securities Act, 15 U.S.C. § 77e. See the Commission’s Complaint.

The Court has entered final judgments against all of the individual Defendants (collectively, the “Final Judgments”), and the Commission voluntarily dismissed its claims against Homes and HR LLC. The Final Judgments, in relevant part, order Faulkner to disgorge $59,998.00 and pay prejudgment interest of $593.05 and a civil penalty of $218,750; Rapoport to disgorge $2,500.00 and pay prejudgment interest of $67.15 and a civil penalty of $40,000; and Davenport to pay a civil penalty of $207,183.00. See the Defendants’ Final Judgments.

The Commission currently holds $56,981.96 paid by the Defendants pursuant to the Final Judgments (the “Distribution Fund”). The Distribution Fund is held in a Commission-designated account with the United States Department of the Treasury. Additional collections; any funds directed to the Distribution Fund by Court or Commission Order, or otherwise; and accrued interest will be added to, and become part of the Distribution Fund.

On October 18, 2023, the Commission filed a Motion for an Order Creating a Fair Fund, Appointing a Tax Administrator, Authorizing Payment of the Tax Obligations and Related Fees and Expenses Without Further Court Order, and Authorizing Limited Discovery to Identify a Possible Investor. See the Motion. On February 14, 2024, the Court approved the Commission’s Motion. See the Court’s Order.

On March 8, 2024, the Commission filed a motion seeking from the Court the entry of an Order to Show Cause why the Court should not approve the Commission’s proposed plan to distribute the Fair Fund (the “Proposed Plan”). See the Motion and accompanying papers.

On April 17, 2024, the Court granted the Commission’s motion and entered the Order to Show Cause.  Individuals and entities who invested in HOMESINC Renaissance between March 1, 2017, and September 11, 2017, inclusive, have until May 17, 2024, to show cause, if there is any, why the Court should not enter an Order approving the Proposed Plan. The process by which individuals and entities can show cause is set forth in the Order to Show Cause, (Section II), to which the Proposed Plan is attached.

For more information, please contact the Commission:

Office of Distributions
Email: ENFOfficeofDistributions@sec.gov