False Financial Statements Draw Suspension

The Michigan Attorney Grievance Commission imposed a consent suspension for a criminal conviction

Respondent and the Grievance Administrator filed a Stipulation for Consent Order of Discipline pursuant to MCR 9.115(F)(5), which was approved by the Attorney Grievance Commission and accepted by Tri-County Hearing Panel #58. The stipulation contained respondent’s admissions that he was convicted by guilty plea of one count of conspiracy to commit an offense against the United States, in violation of 18 USC § 371, a felony, in United States of America v Tyler N Ross, US District Court, Eastern District of Michigan, Case No. 23-cr-20451. In accordance with MCR 9.120(B)(1), respondent’s license to practice law in Michigan was automatically suspended, effective September 28, 2023, the date of respondent’s conviction

A Department of Justice press release described the offense

A California real estate executive was sentenced today to one year and one day in prison, followed by two years of supervised release, and ordered to pay a fine of $200,000 for engaging in an extensive multi-year conspiracy to falsify financial statements.

According to court documents and evidence presented at sentencing, Tyler Ross, 38, of San Francisco, and formerly of Michigan, served as co-chief executive officer of ROCO Real Estate LLC and ROCO Management LLC, both of which were based in Bloomfield Hills, Michigan. The ROCO companies operated as a commercial real estate investment firm engaged in the business of purchasing, managing, and selling multi-family residential properties, such as apartment complexes, located in Michigan and elsewhere.

Between 2015 and 2019, Ross and his co-conspirators caused false financial documents, including historical operating statements that deleted or reduced actual expenses, to be submitted to mortgage lending businesses for underperforming ROCO properties, making the properties appear to be more profitable than they were in order to obtain refinancing or to avoid the exercise of certain contractual provisions by the lenders to protect themselves. Ross, who was a licensed attorney, acknowledged that he personally falsified historical operating statements during the conspiracy and directed other members of the conspiracy to assist with the creation and submission of falsified financial statements to mortgage lending businesses.

The court also found that Ross falsified financial documents in connection with the 2019 sale of 43 ROCO properties to a privately held real estate investment company. Ross supplied the false financial information to the buyer of the properties and ultimately to the financial institution that issued a $481 million loan for the transaction. Ross himself received over $2 million in proceeds from the 2019 sale.

Ross pleaded guilty in September 2023 to one count of conspiring to commit an offense against the United States.

(Mike Frisch)