Monday, February 22, 2016

FBI raids residential lender's Grapevine offices as hedge fund accusations turn into criminal probe

FBI raids United Development Funding in Grapevine, major housing financier. (NBC5)
The FBI raided United Development Funding in Grapevine, a major housing financier. (NBC5)

FBI agents raided the Grapevine offices of United Development Funding on Thursday, elevating a Dallas hedge fund’s accusations into a criminal investigation.

The real estate investment trust has previously disclosed a Securities and Exchange Commission investigation dating back to April 2014. In recent months, though, Kyle Bass and his Hayman Capital Management hedge fund have been loudly shorting UDF shares and launched to trumpet concerns that it's running a “Ponzi-like” real estate investment scheme.

FBI spokeswoman Allison Mahan confirmed that agents were at UDF’s offices at 9 a.m. and were still there late in the afternoon. She declined to provide other details of a criminal search warrant, but video of the scene by NBC 5 showed boxes being removed from the building.

By Maria Halkias of The Dallas Morning News