The founder and CEO of a Denver-based development firm is facing securities fraud charges after a Securities and Exchange Commission investigation of 10 development projects. The SEC alleges that Brian Watson, founder of Northstar Commercial Partners, deceived investors in real estate projects by falsely promising they’d invest their own money along with that of other investors.
The SEC filing shows five securities fraud charges against Watson, who was also once a candidate for Colorado state treasurer. The SEC’s civil complaint was filed in a Denver federal district court. Watson and Northstar claimed they’d put up 4 to 5 percent of the necessary equity of the development projects, but the SEC alleges they made no such investment for eight of the projects and invested just a “small fraction” of the promised amounts for the other two.
SEC’s charges are the latest legal difficulties for Watson and Northstar, who were also sued by Amazon in 2020 for racketeering and fraud. In that case, Amazon alleged Northstar paid kickbacks to two Amazon employees in exchange for helping the real estate firm land multiple data center development deals. The lawsuit led to an FBI investigation and the feds serving a search warrant at Watson’s Cherry Hills Village, Colorado, mansion in 2020.
No criminal charges have been filed in the FBI’s case, but federal criminal investigators are asking for a pause in the civil litigation against Watson and Northstar so their investigation can take priority. With the multiple legal cases stacked against them, Watson and Northstar could be wading through the hot waters of all this litigation for quite some time.
