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The Securities and Exchange Commission Files Fraud Lawsuit Against
Chicago Hotel/Condo Developer Robert Falor, Alleging He Stole
$4.6 million from Investors in Three Hotel Projects


Litigation Release No. 21208 / September 11, 2009

SEC v. Robert D. Falor, et al, Case No. 1:09-CV-5644 (N.D. Ill., filed September 11, 2009)

The United States Securities and Exchange Commission announced that on Sept. 11, 2009, it filed a civil injunctive action against Robert D. Falor (Falor) alleging that he fraudulently offered and sold approximately $9 million of securities to approximately 55 investors in the form of membership interests in various limited liability companies that he controlled and operated. From approximately July 2004 through April 2005, Falor, offered and sold securities in Printers Row Investors, LLC, South Beach Investors, LLC, and Tides Hotel Investors, LLC for the purported purpose of buying old hotels, converting them to hotel-condominiums and selling the hotel-condominium units at a profit. 

Projects include:
Two Miami projects, the Breakwater and Edison and the Tides Hotel; and the 162-room hotel at 500 S. Dearborn St. in Chicago, now known as the Hotel Blake.

Contrary to these representations, Falor used a majority of the investors' money to make payments to himself and to his wife, to buy luxury automobiles, to lease private airplanes, and to finance other real estate projects. Due to the misappropriation of investor funds, Falor had insufficient capital to complete the conversion projects. All of the properties that were the subject of the conversion projects have been sold and any funds received from these sales were distributed to Falor, not the investors.

The SEC's complaint, filed in the U.S. District Court for the Northern District of Illinois Eastern Division, alleges that Falor violated Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC seeks a permanent injunction against Falor, disgorgement with prejudgment interest, and civil penalties. The complaint also seeks disgorgement plus pre-judgment interest of all investor funds or assets acquired with investor funds from Relief Defendant, Jennifer L. Falor, Falor's former wife.

Also See: The Falor Companies Positions Itself Quickly as a Leader in the Condo-hotel Industry; Will Close $1.2 billion in Hotel Acquisitions by the End of 2005 / October 2004
The Falor Companies Acquiring The Tides Hotel on Miami's South Beach; Will Convert into a Condominium-hotel / August 2004
Without Trademark Concerns, Nicky Hilton, Younger Sister to Paris Hilton, Licenses Her Name to the Falor Co. for a Hotel Brand; Miami Hotel/Condo Project Will be Named "Nicky O, a Nicky Hilton Hotel" / July 2006
Robert Falor, Once a Leader in South Florida's Condo-hotel Conversion, Surrendors Management of the Royal Palm; Claims "No Market for Condo Hotels Right Now" / May 2007



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