Republican congressional candidate implicated in $44 million ‘Ponzi scheme’ settlement

Republican Paul Wassgren from Ashland is highlighting his background as a financial services broker and corporate attorney as he competes against three other GOP contenders in a primary for Northern Wisconsin’s 7th Congressional District. Nonetheless, his involvement in a $44 million settlement two years earlier has raised eyebrows. The settlement resolved a class action lawsuit in which investors accused the Florida-based company Wassgren represented of running a “Ponzi scheme” that amassed over $170 million.

In response to the lawsuit and settlement, Wassgren’s campaign pointed fingers at “financial ambulance-chaser lawyers” for their involvement in the case, despite the fact that the SEC had initially triggered the investigation. Back in 2020, the SEC initiated an emergency enforcement action against EquiAlt LLC, a private real estate firm based in Florida, as well as its executives Brian Davison and Barry Rybicki. Wassgren was serving as the company’s legal counsel at the time.

According to the SEC complaint, EquiAlt had managed to raise $170 million from a pool of more than 1,100 investors nationwide through deceptive unregistered securities offerings. The defendants allegedly lured investors in by promising that their funds would be used to purchase real estate in distressed regions of the U.S., resulting in lucrative returns for them. However, instead of fulfilling these promises, EquiAlt, Davison, and Rybicki were accused of diverting millions of dollars from investors for their personal use, in breach of their fiduciary duties.

Despite Wassgren’s name not being explicitly mentioned in the SEC complaint, he was identified as a defendant in the subsequent class action lawsuit filed by disgruntled EquiAlt investors in July 2020. These investors collectively claimed losses amounting to millions of dollars.

The allegations brought forth by investors paint a troubling picture of EquiAlt’s business practices, suggesting that the company and its executives had prioritized personal gain over fulfilling their obligations to investors. These accusations have cast a shadow over Wassgren’s tenure as the company’s legal representative and brought to light concerns about his judgment and decision-making in the handling of legal matters relating to EquiAlt.

As Wassgren continues his campaign for Congress, voters in Northern Wisconsin will undoubtedly scrutinize his past involvement with EquiAlt and the implications of the settlement reached in the class action lawsuit. The outcome of the primary election will likely hinge on how well Wassgren addresses these concerns with transparency and accountability, especially in light of the serious allegations levied against the company he once represented.