FOR IMMEDIATE RELEASE
Washington D.C. — The Securities and Exchange Commission today charged a Virginia real estate developer with skimming investor funds that were intended for use in purchasing an office building near the site of a planned commuter rail station on the Washington Metropolitan Area Transit Authority’s Silver Line. The complaint also alleges commingling and misappropriation of investments in various real estate and other projects.
As alleged in the SEC’s complaint, over at least a four-year period, Todd Elliott Hitt used two of his companies – Kiddar Capital LLC and Kiddar Group Holdings, Inc. – to raise more than $20 million from investors for the purpose of acquiring and operating the Silver Line office building, new home construction in Northern Virginia, and a fund managed by Hitt that invested in a startup business. The SEC alleges that Hitt made misrepresentations about his own investments in the ventures and misappropriated several million dollars of investor funds to support his extravagant lifestyle and make Ponzi-like payments to prior investors.
As part of his settlement with the SEC, the terms of which remain subject to court approval, Hitt consented to entry of a judgment freezing his assets and imposing conduct-based injunctions that enjoin him from participating in the offer or sale of interests in real estate development companies. Hitt also has consented to the appointment of a receiver over a number of the corporate defendants and relief defendants. Under the terms of the proposed settlement, the receiver would protect investors, prevent asset dissipation and loss, and attend to the businesses. Penalties and disgorgement would be determined by the court at a later date.
“We moved quickly to preserve the value of investors’ stake in a number of commercial and residential properties in Northern Virginia,” said Melissa Hodgman, Associate Director of the SEC’s Division of Enforcement. “The total package of relief obtained in the settlement ensures that Hitt’s assets will be used to compensate harmed investors and will limit his ability to harm investors in the future.”
The SEC’s complaint, filed in U.S. District Court for the Eastern District of Virginia, charges Hitt, Kiddar Capital, and Kiddar Group with violating the antifraud provisions of the federal securities laws.
In a parallel action, the U.S. Attorney’s Office for the Eastern District of Virginia today announced criminal charges.
The SEC investigation was conducted by Daniel H. Rubenstein, Michael T. Grimes, Keith A. O'Donnell, Michael S. Fuchs, Shipra G. Wells, and Paul Harley, and supervised by C. Joshua Felker. The SEC’s litigation will be led by Patrick Costello and Nicholas Margida under the supervision of Fred Block. The SEC appreciates the assistance of the Federal Bureau of Investigation and the U.S. Attorney’s Office for the Eastern District of Virginia.