Paul Waln launched Halcyon, a real estate investment fund, in August 2009 to solicit investments in the purchase and renovation of West Seattle apartments, among other real estate projects. The rules were simple. Investors would have to leave their money in the pool for 10 years, after which Walun would return his principal and any earnings, which were expected to be about 20% a year.
But by 2019, the money was gone. Mr. Waln and his now ex-wife, Tamara King, spent all of the funds on personal expenses.
Mr. Waln and Mr. King, both Dallas-based real estate professionals, were indicted by a federal grand jury this week on charges of conspiracy, wire fraud and money laundering. Acting U.S. Attorney Tessa M. Gorman said the two are scheduled to appear for arraignment on Oct. 12, according to a news release.
secret financing
According to the indictment, Waln solicited investments in a real estate fund called Halcyon from August 2009 to December 2013. The 22 victims, most of whom lived in Seattle, invested $2.25 million into the fund. Mr. Waln was entitled to a 1 percent commission for managing the investment fund.
In 2013, Ms. Waln married Mr. King, who was also a real estate agent. Waln and King then jointly managed an investment fund. From February 2014 to December 2018, they conspired to divert funds from the fund for personal expenses. The two secretly transferred hundreds of thousands of dollars at a time from the fund to the management company and then into Mr. King’s personal account. In some cases, they wrote secret memos characterizing these transfers as “loans,” but the money was never repaid. Investors were never informed about the “loan.”
Under the terms of the investment, Mr. Waln and Mr. King were required to distribute the investment funds to investors in 2019, but by the end of 2018 they had misappropriated the entire amount. In December 2018, Waln sent a letter to investors falsely stating that the fund’s general contractor had been diagnosed with cancer. Mr Waln told investors that this would result in a two to three year delay before funds could be returned to investors. The contractor in question had never been diagnosed with cancer.
Finally, in October 2019, Mr. King notified investors that all their funds were gone and their investments had failed. All remaining investors lost their entire investments.
accusations and allegations
The defendants are charged with conspiracy, eight counts of wire fraud, and two counts of money laundering. The conspiracy charge carries a maximum penalty of five years in prison. Wire fraud and money laundering are punishable by up to 20 years in prison. The case is being investigated by the FBI and is being prosecuted by Assistant United States Attorney Seth Wilkinson.
Paul Waln owns a home at 1712 Buckingham Drive in The Manors, a high-end Waterford subdivision, according to the Tarrant County Appraisal District. The home was on and off the market from May 2021 until last month. This stone-decorated Tudor building was built in 2005 and has five bedrooms, seven bathrooms, five fireplaces, and 6,088 square feet. Just recently, an amount equal to the amount Mr. Waln and Mr. King allegedly defrauded investors – $2.25 million – hit the market.
The indictment of Paul Waln and Tamara King by Joe Jemison England (Scribd)
