FBI opens probe of Jon Venetos’ Lurin Capital

The financial unraveling of Jon Venetos' Lurin Capital is now the subject of a Federal Bureau of Investigation probe.

An email sent to an investor from the FBI's Dallas Division shared with The Real Deal revealed that the agency has opened an investigation into Venetos, Lurin Capital and associated entities. The note provided an email address through which victims can provide comments and ask questions: LurinVictims@fbi.gov .

The Real Deal also obtained a public link to an FBI form titled "Lurin Investigation Questionnaire" seeking information from "possible victim" investors. The form asks for details about investors' contributions and any distributions received.

The company's downfall has been punctuated by claims of fraudulent dealings from lenders and former Lurin employees. Keybank accused Venetos of transferring $25,000 from his accounts with the bank to a personal account. Vista Bank accused him of falsifying account statements from the lender in an attempt to take out loans elsewhere.

In addition, a former employee who worked in property management and asked to remain anonymous claimed Lurin lied on reimbursement requests to lenders by inflating costs of repairs and submitting invoices for work that wasn't done.

The source provided a copy of an email sent by a lender rep after an inspection of the Sutton in Alabama in which the rep picked up on the discrepancy: "None of the units inspected are 100 percent complete as requested in the draw," he wrote. "The roofing line item is 97 percent drawn with no work completed or materials on site."

Plus, two former employees said Lurin stopped being eligible to offer a 401(k) plan to employees this fall but never informed employees. They provided documentation that shows their 401(k) contributions were withdrawn from their paychecks in November but not deposited into their Fidelity-managed 401(k) accounts.

The newly launched federal investigation is the latest twist of the yearslong collapse of the Dallas-based value-add multifamily firm, which began to gather momentum in earnest last spring.

Like numerous other multifamily syndicators, Venetos launched Lurin Capital in 2016 and swept through the Sun Belt, amassing 10,000 shabby Class C apartment units across five states with plans to upgrade the properties, raise rents and sell them at a profit.

Unlike other syndicators, Venetos dove into the space with a pedigreed finance background; prior to launching Lurin, he had risen to the head of the Surveyor Capital stock picking unit of billionaire hedge funder Ken Griffin's Citadel.