Brian Serpone takes the Fifth at Levee Breaks bankruptcy hearing – Cape Cod Times

Posted: February 5, 2022 at 5:11 am

YARMOUTHIf investors were hoping for clarity during a Jan. 19, telephone hearing in the bankruptcy case of Levee Breaks Investment Group, they didnt get it.

The purpose of the hearing, called a341 Meeting, is to establish the debtors, assets, liabilities, income, expenses, and other relevant financial circumstances in a bankruptcy case.

Bankruptcy Trustee David Madoff asked Brian Serpone,who owns Levee Breaks, a series of questionsto find out what happened to investors money, how and where it was spent, and even where he lived. Investors were allowed to ask their own questions.

Serpone didnt answer a single one, according to investor Nancy Marble. Hetook the Fifth to each and every question he was asked, she said.

The Fifth Amendment gives a person the right to refuse to answer questions that might incriminate them.

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Serpone even refused to answerwhen asked if 14 Rainbow Road, West Yarmouth, is his current address. The address is listed on the Secretary of States website for several of Serpones limited liability companies, including Headley Grange Investments LLC, Brian Serpone Productions LLC, Hope Music Foundation LLC, and The Residences at Woodcrest LLC.

The property at 14 Rainbow Road is assessed at $308,400, according to town records. The owner is listed as Mary Katherine Harmon who bought it from Richard and the lateKathleen Serpone, for $210,000 in 2015.

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Levee Breaks, a Yarmouth-based limited liability corporation, filed for bankruptcy Oct. 22, 2021 in U.S Bankruptcy Court in Boston. Founded by Brian Serpone in 2015, Levee Breaks' business involved the construction, development, rehabilitation and sale of properties for the benefit of its members.

Members, or investors, were sold $10,000 and $20,000 promissory notes with a promised10% annualreturn on their investment. But those promissory notes turned out to be unregistered securities, andLevee Breaks was not registered with the state's Securities Division, as required by Massachusetts law, according to state regulators.

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Since the October bankruptcy filing, more than 70 creditors, about 55 of whom are investors,have filed claims against the corporation. Some of those creditors are investors, and some are banks holding mortgages on the properties.

There have been $4.5 million in total claims filed in the bankruptcy case, of which $1.4 million are secured claims, Madoff said. The investors' claims are unsecured.

Madoff is still reviewing each claim to determine if the records are accurate.He has asked the bankruptcy court forpermission to hire a forensic accountant to review Levee Breaks' books and accounts to see if there was co-mingling of funds, or wrongful transfers made.

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Thecourt has the authority to make sure that anything that should not have left the estate comes back into the estate, according to Professor Emeritus Michael Hillinger, who teaches consumer bankruptcy at the University of Massachusetts Law School. A trustees job is looking for all possible things a company did that can be recaptured for the benefit of the estate, he said.

There was a lot of money invested and a lot of money not accounted for, Madoff said about the Levee Breaks bankruptcy.

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Madoff was also appointed the trustee for Headley Grange LLCwhen that corporation filed for Chapter 7 bankruptcy in October 2021. Brian Serpone is the resident agent for Headley Grange. His address is listed as 14 Rainbow Roadin the LLCs certificate of organization in 2017.

The company was engaged in commercial and residential real estate development, acquisition, renovation, and sale.

Eight claims totaling $245,500 were filed in the Headley Grange bankruptcy case.

Contact Denise Coffey at dcoffey@capecodonline.com. Follow her on Twitter: @DeniseCoffeyCCT.

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Brian Serpone takes the Fifth at Levee Breaks bankruptcy hearing - Cape Cod Times

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