Home » Business » Real Estate Swindler Sentenced to 15 Years

Real Estate Swindler Sentenced to 15 Years

James Elton “Jim” Warr of Austin, who promised guaranteed returns from investing in real estate, was sentenced to 15 years in state prison on Dec. 1 after his conviction in Travis County on four first-degree felony counts.

Warr, 69, stole $1.1 million from individuals who bought investment contracts in unregistered real estate notes offered by his company, Warr Investment Group (WIG). The notes were supposedly backed by income-producing properties.

Warr promised investors they would earn 8% annual interest compounded monthly – an extraordinary, and unrealistic, return for what Warr said was a “no-risk” investment.

Warr told investors that all their money would be used to purchase property or real estate notes. Warr said he would take his share of the profits only after the investors were paid.

Warr never invested in enough properties to generate the promised returns. Instead, he used investor funds to pay commissions to at least one unregistered sales agent and buy a Mercedes Benz, among other expenses unrelated to the real estate investment program.

Warr was never registered to sell securities, and the WIG investments were not registered for sale.

After a five-day trial, Warr was found guilty of theft, securities fraud, money laundering, and misapplication of fiduciary property in the 299th District Court of Travis County.

The State Securities Board started investigating Warr in 2010. At the time Warr pitched his real estate investment ideas in numerous online videos.

The Warr Investment Group’s real estate deals were a safe alternative to traditional investments like stocks or certificates of deposit, Warr told prospective investors. In one YouTube video Warr said, “I’m like having an uncle in the finance business.”

Warr’s deceit extended to encouraging investors to transfer their funds to a self-directed Individual Retirement Account that was not independent, but instead was in his daughter’s name and secretly controlled by Warr.

The Deputy Securities Commissioner entered an Emergency Cease and Desist Order against Warr and WIG in 2010.

As a result of the State Securities Board’s action, the Office of the Texas Attorney General in 2011 requested that WIG and a related company be placed in receivership. A Travis County state district court agreed and froze the companies’ assets.

The receivership returned to investors 44% of their money, an unusually high recovery in an investment fraud case.

A Travis County grand jury indicted Warr on the four felony charges in 2015.

The case was prosecuted by Travis County assistant district attorney Keith Henneke with the assistance of State Securities Board enforcement attorneys Tina Lawrence and Matthew Leslie, who were appointed special prosecutors by the Travis County DA’s office, financial examiner Rani Sabban, and legal secretary Kathryn Miner.

Leave a Reply

%d bloggers like this: