On June 10, 2019, the Illinois Securities Department, Massachusetts Securities Division, New Hampshire Bureau of Securities Regulation, and New Jersey Bureau of Securities each charged Glenn C. Mueller of West Chicago, Illinois, and his companies for selling unregistered securities. Mueller developed his scheme for over 40 years, building a web of at least 32 real estate development companies and selling at least $47 million of unregistered securities in the form of promissory notes in these companies to consumers. He referred to these promissory notes as “CD alternatives”, “CD IRAs”, or represented them as being real estate investment trusts (“REITs”). His companies include, but are not limited to, Northridge Holdings, Ltd., Eastridge Holdings, Ltd., Southridge Holdings, Ltd., Cornerstone II Limited Partnership, Unity Investment Group I, 561 Deere Park Limited Partnership, 1200 Kings Circle Limited Partnership, & 106 Surrey Limited Partnership (collectively referred to as “Mueller Entities”). Mueller organized Northridge in North Dakota with the subsidiaries incorporated in Illinois.
Northridge, founded by Mueller in 1984, is the primary property management company through which Mueller ran his scheme and is the general partner of many of his other limited partnerships. Mueller, through Northridge and the Mueller Entities, owned properties through the Chicagoland area. Mueller set up a “CD Account” through the Northridge website for investors. Once Northridge received the funds, he solicited investors to use the funds in their Northridge CD Account to invest in his various companies.
The Illinois Securities Department filed a Temporary Order of Prohibition against Mueller, Northridge, and several of the Mueller Entities. Mueller solicited 140 Illinois residents to invest over $19 million through 244 promissory notes. Some of these investments were sold to clients in their IRAs.
The New Hampshire Secretary of State ordered that Glenn C. Mueller, along with his companies, immediately cease and desist operations, make rescission offers to six investors listed in the State of New Hampshire who collectively hold outstanding balances totaling $847,161, in addition to paying $107,500 in fines and costs. New Hampshire also barred Mr. Mueller and his companies from engaging in the securities business in the state.
The New Jersey Attorney General and Bureau of Securities detailed that between March 2011 and October 2018 Mueller illegally sold $10.46 million in unregistered securities to sixty-two New Jersey investors, including investments in Northridge, Eastridge, Unity, Southridge, and Amberwood. Mueller allegedly contracted with at least two New Jersey-based unregistered agents to solicit investors, who received commissions of between 2% and 10% of the principal. The commission rate was based on the term of the promissory note and whether it was an initial investment or renewal of an existing note. The unregistered agents earned at least $694,977 in commission and consulting fees.
According to the Massachusetts Securities Division, Mueller solicited at least six Massachusetts investors to invest $926,000 in his real estate companies. Some of these investments date back to 2005, and investors have not received any distributions or return of their principal. He contracted at least five “finders”, to solicit investors. These finders were not registered to sell securities and received at least $67,017 in commissions for selling Mueller’s promissory notes.
Mueller targeted investors by claiming these investments were certificates of deposit or real estate investment trusts, when in reality they were promissory notes. Promissory notes are securities and so they must be registered with the state in which they are sold, or they must be exempt from registration, which these were not. Moreover, anyone who sells securities, including promissory notes, must be registered to do so. Mueller, his companies, and the unregistered agents violated several state securities laws because he and his “finders” were not registered to sell securities or provide investment advice in any state or with FINRA or the SEC, nor were the securities that they sold.
The attorneys at Stoltmann Law Offices have forty years of combined experience recovering millions of dollars on behalf of investors who lost their hard-earned savings in fraudulent promissory note investment schemes. When you are solicited to make any investment, it is important for you to determine whether the individual, firm, and security are properly registered by contacting your local securities department, FINRA, and/or the SEC. If you lost money in Mr. Mueller’s scheme, or any similar fraudulent investment, contact Stoltmann Law Offices for a free evaluation. We are a contingency fee law firm, meaning we don’t get paid until you do.