2
/ 10
Elevated Concern
Source Documents Analyzed
Fox, Stuart.pdf — CLEAR Background (214 pp)
FOX FINANCIAL.pdf — CLEAR Business Report (23 pp)
Fox Financialeditedfraudreport.docx — DHS Referral Letter
Promissory Note — $750,000 Lance Lybrand
Foxfinancialaddendums.pdf — Utah Corp Filings
foxfinancialtcrssec.pdf — SEC TCR #17170-540-879-992
stuartfoxbackground.pdf — CLEAR Background (214 pp)
stuart@foxfinancial.com_report.docx
StuartFoxtapedcall.mp3 — Recorded Call
Facebook Sponsored Ad Screenshot
LinkedIn Profile Screenshot
Score Calculation — Deterministic Algorithm
score = 10
− 2 × (B1: Buffett-Zone returns) → 8
− 2 × (B2: Mass Facebook advertising) → 6
− 2 × (B3: No PPM / No Form D) → 4
− 2 × (B4: No audited financials) → 2
→ Class B ≥ 4: cap at 3 → 3
+ Class A ≥ 1: cap at 3 → 3
− 1 × (A1: Guaranteed returns) — first A, sets cap
− 1 × (A2: "Safe and reliable" / risk-free language) — second A: −1
− 1 × (C1: Pressure tactics — "Start your investment now")
− 1 × (C2: Vague use of proceeds) → Score: 2
− 2 × (B1: Buffett-Zone returns) → 8
− 2 × (B2: Mass Facebook advertising) → 6
− 2 × (B3: No PPM / No Form D) → 4
− 2 × (B4: No audited financials) → 2
→ Class B ≥ 4: cap at 3 → 3
+ Class A ≥ 1: cap at 3 → 3
− 1 × (A1: Guaranteed returns) — first A, sets cap
− 1 × (A2: "Safe and reliable" / risk-free language) — second A: −1
− 1 × (C1: Pressure tactics — "Start your investment now")
− 1 × (C2: Vague use of proceeds) → Score: 2
Class A (Disqualifying) flags2 — caps score at 3, −1 for each beyond first
Class B (Serious) flags4 — independent cap at 3 triggered
Class C (Contextual) flags2 — −1 each
Raw calculation10 − (4×2) = 2, capped at 3 by B≥4, then −1 for second A = 2
Final Score2 / 10 — Elevated Concern (Band 1–3)
Class A — Disqualifying Flags (2 found · any one caps score at 3)
Class A · A1 · Disqualifying
Guaranteed / Fixed Returns Language
"EARN UP TO 18% FIXED ANNUAL INTEREST RETURNS" — Fox Financial LLC Facebook Sponsored Ad, May 9, 2024
"Fox Financial, LLC, by their own admission, is a hybrid between a hard money lender guaranteeing investors 18% annual returns" — DHS Referral Letter, May 27, 2024
"Fox Financial LLC agrees to pay Lance Lybrand... the principal sum of $750,000 plus 18% annual interest" — Commercial Promissory Note, May 16, 2024
The word "FIXED" in "18% FIXED ANNUAL INTEREST RETURNS" and the DHS referral's direct quote "guaranteeing investors 18% annual returns" constitutes Class A disqualifying language. No private real estate investment can guarantee a fixed 18% return — this is the single most reliable fraud indicator in the Minkow framework, appearing in every major Ponzi scheme he investigated. The promissory note confirms this is the actual contractual rate offered to at least one investor ($750,000).
Class A · A1 variant · Disqualifying
"Safe and Reliable" Risk-Free Language
"Are you tired of 📉 volatile and unpredictable investments? Looking for a way to 🌱 grow your wealth in a safe and reliable way?" — Fox Financial LLC Facebook Ad copy, May 9, 2024
Positioning a private real estate investment as "safe and reliable" in contrast to "volatile and unpredictable investments" is functionally equivalent to a risk-free claim. The deliberate framing of the investment as the safe alternative to market volatility is designed to suppress the investor's perception of risk. Combined with the "FIXED ANNUAL INTEREST RETURNS" headline, this ad contains an integrated guarantee-plus-safety framing pattern that Minkow specifically documented in Harbor City Capital and NRIA.
Class B — Serious Flags (4 found · triggers ≤3 cap)
Class B · B1 · Serious
Returns in "Buffett-Shame Zone" — 18% Fixed Annual
"EARN UP TO 18% FIXED ANNUAL INTEREST RETURNS" — Confirmed rate in: Facebook Ad · Promissory Note · DHS referral · Company website
18% fixed annual returns places Fox Financial squarely in the Buffett-Shame Zone (17–25%+). Warren Buffett's Berkshire Hathaway has averaged ~20% annually over 50 years with exceptional talent, vast diversification, and decades of experience. A Utah LLC formed in 2020 claiming to routinely deliver 18% fixed returns on apartment renovations — while charging only 18% on its own hard money notes — presents a mathematical impossibility: its own cost of capital (18% to investors) would consume all operating returns from a 9-unit and 22-unit apartment building in Cleveland and Peoria.
Class B · B2 · Serious
Mass Advertising of an Unregistered Private Offering
Facebook Sponsored Ad from "Fox Financial" (Sponsored · 🌐 Public) — May 9, 2024 · 288+ reactions · 90 comments · Lead generation form "Get Started Earning Now!" with "Book now" CTA
Fox Financial ran a public-facing, geotargeted Facebook sponsored advertisement with a lead-capture form ("FORM ON FACEBOOK — Get Started Earning Now!") to solicit unaccredited investors for what appears to be an unregistered securities offering. This is a textbook violation of SEC Rule 506(b) general solicitation restrictions. With 288+ reactions and 90 comments, the ad achieved significant retail reach. The use of Facebook sponsored ads to market a "hard money lending" investment with fixed returns to the general public is a documented pattern in every large-scale fraud case Minkow investigated.
Class B · B3 · Serious
No PPM / No Form D on SEC EDGAR
SEC TCR Submission #17170-540-879-992 filed May 29, 2024. No Form D filing found for Fox Financial LLC (Utah) on SEC EDGAR at time of referral. No Private Placement Memorandum referenced in any source document.
Fox Financial LLC appears to be soliciting investments through Facebook ads, promissory notes, and direct investor contact without filing the required Form D (required within 15 days of first sale under Regulation D). The absence of a Form D filing means the offering is either completely unregistered or operating outside all SEC exemptions — both of which constitute securities law violations. The SEC TCR filing (Submission #17170-540-879-992, May 29, 2024) confirms the regulatory concern was escalated to the SEC.
Class B · B4 · Serious
No Audited Financials / No Independent CPA
DHS referral letter identifies Fox Financial as conducting a "Reg D multifamily real estate sector" offering. No audited financials, independent CPA name, or audit firm referenced in any source document. Entity converted from DBA to LLC on 07/13/2020 — less than 4 years of operating history.
No source document references audited financial statements, an independent CPA, or an audit firm. For an entity claiming to manage investor capital at 18% fixed returns across multiple states (Utah LLC, properties in Cleveland OH and Peoria IL), the complete absence of audited financials is a fundamental transparency failure. Investors receiving promissory notes for $750,000+ have no independent verification that the company's assets exist, are properly valued, or generate sufficient income to service the notes.
Class C — Contextual Flags (2 found · −1 each)
Class C · C1 · Contextual
Pressure Tactics — Act-Now Framing
"Start your investment now. Fill out the form below." — Facebook Ad graphic text
"Get Started Earning Now!" — Facebook lead-gen CTA button text
The imperative "now" appears twice in the ad — in the graphic and in the lead form CTA. While not as aggressive as "only 3 spots left" or "wire by Friday," the "Start now / Get started now" framing is designed to compress the decision timeline and discourage due diligence. The lead capture form (versus a phone call or email) also bypasses the friction that would naturally lead an investor to investigate before providing contact details.
Class C · C2 · Contextual
Vague Use of Proceeds
Promissory note: "These funds are to be used in the acquisition and renovation of the 9 unit apartment building located at 881 Eddy Road Cleveland Ohio 44108 and the 22 unit apartment complex located at 1513-1519 Sara Lane Peus[burg?]" — foxfinanacialCommercial Promissory Note
Facebook ad and website do not specify which properties investor funds will be directed to, or how multiple investor funds are pooled.
While the specific promissory note does name two properties, the public-facing marketing provides no disclosure of how investor funds are pooled, prioritized, or deployed across multiple borrowers. The gap between the specific note (naming properties) and the general Facebook solicitation (promising 18% to anyone who "gets started now") creates a misrepresentation risk — investors responding to the ad have no reason to believe their capital is tied to specific, verifiable collateral.
Key Evidence Extracted
Claimed Return
18% Fixed Annual Interest
Confirmed in: Facebook ad, DHS referral letter, $750,000 promissory note, company website. "FIXED" is the disqualifying term.
Advertising Channel
Facebook Sponsored Ad — Public
288+ reactions, 90 comments, "FORM ON FACEBOOK" lead-gen. Soliciting general public for unregistered securities.
Entity Details
Fox Financial LLC
1145 S 800 E #140, Orem UT 84097. Converted from DBA "Fox Financial" on 07/13/2020. Entity #11850672-0151 (Utah).
Principal
Stuart Fox
Real estate since 1995. Mortgage loan officer, hard money lender, landlord, home builder, flipper, wholesaler. Lost everything in 2008 recession. Contact: Robert@foxfncl.com / +1(830) 388-9920.
Known Investor Promissory Note
$750,000 — Lance Lybrand, NY
Effective May 16, 2024. 18% annual interest. Properties: 881 Eddy Rd, Cleveland OH 44108 (9 units) and 1513-1519 Sara Lane (22 units).
Regulatory Referrals
DHS + SEC
DHS: Special Agent Luther Selby, 7355 Woodland Dr, Indianapolis IN. SEC TCR #17170-540-879-992, filed May 29, 2024.
Reported Context
Reg D Multifamily Sector Investigation
Discovered during research series including Cardone Capital, BAM Capital, Gray Capital, Viking Capital, QC Capital, Vonfinch Capital.
Form D / SEC EDGAR
Not Found
No Form D filing identified at time of referral. Offering appears to be entirely unregistered. Required within 15 days of first sale.
Source Screenshots
Key Evidence — Class A Trigger · Facebook sponsored ad captured May 9, 2024 at 6:01 AM. "EARN UP TO 18% FIXED ANNUAL INTEREST RETURNS. Start your investment now." 288 reactions · 90 comments · Public solicitation. Robert@foxfncl.com · +1(830) 388-9920.
Principal Background · Stuart Fox LinkedIn profile. Self-described: mortgage loan officer, hard money lender, landlord, new home builder, flipper, wholesaler. Lost everything in 2008 recession. Current BHAG: own 1,000 rental properties at $1,000/month cash flow each. No securities license disclosed.
Case Timeline
July 13, 2020
Fox Financial converts from DBA to Fox Financial LLC (Utah Entity #11850672-0151). Non-refundable processing fee $37.00 paid to Utah Division of Corporations.
1995 – 2020
Stuart Fox operates as mortgage loan officer, hard money lender, landlord, home builder, flipper, and wholesaler. Lost everything in 2008 recession while flipping and doing speculative new builds.
May 9, 2024
Fox Financial runs public Facebook sponsored advertisement: "EARN UP TO 18% FIXED ANNUAL INTEREST RETURNS." Ad shows 288+ reactions and 90 comments. Lead-gen form "Get Started Earning Now!" active.
May 16, 2024
Commercial Promissory Note executed: Fox Financial LLC borrows $750,000 from Lance Lybrand (209 Mulberry St FL 1, New York NY 10012) at 18% annual interest. Collateral: Cleveland OH 9-unit and Peoria IL 22-unit apartment buildings.
May 27, 2024
Fraud referral letter submitted to DHS Special Agent Luther Selby (7355 Woodland Drive, Suite 200, Indianapolis IN 46278) identifying Fox Financial LLC as "guaranteeing investors 18% annual returns" — a hybrid hard money lender / real estate fund operating without proper disclosures.
May 29, 2024
SEC Tips, Complaints & Referrals (TCR) submission filed. Submission #17170-540-879-992. Filed 7:30 PM EDT. SEC acknowledges receipt and opens review under non-public investigation policy.
Independent Verification Steps
Search "Fox Financial LLC" + "Stuart Fox" on SEC EDGAR full-text search (efts.sec.gov) for any Form D or enforcement action. Cross-reference Utah entity #11850672-0151.
Search Stuart Fox on FINRA BrokerCheck (brokercheck.finra.org) for any registration, bar, or disciplinary history as a securities seller or investment adviser.
Run property title search on 881 Eddy Road, Cleveland OH 44108 and 1513-1519 Sara Lane (Peoria area) to confirm Fox Financial LLC has actual ownership or lien position — verify the collateral exists and is properly secured.
Check Utah Division of Corporations (corporations.utah.gov) for full filing history, registered agent, and annual report compliance for Fox Financial LLC (#11850672-0151).
Search PACER (pacer.gov) and Trellis.law for any civil litigation, bankruptcy, or judgment records against Stuart Fox or Fox Financial LLC in Utah, Ohio, or Illinois.
Contact DHS Special Agent Luther Selby (luther.selby@ice.dhs.gov, 7355 Woodland Dr Suite 200, Indianapolis IN 46278) to determine investigation status.
Contact the Utah Division of Securities to verify whether Fox Financial LLC has any state securities registration or exemption on file for its investment offering.
Review the recorded call (StuartFoxtapedcall.mp3) for additional verbal representations about returns, guarantees, or investor protections — verbal guarantees have evidentiary value in securities fraud cases.
Regulatory Referral Guidance
SEC Whistleblower Program
A TCR was already filed (Submission #17170-540-879-992, May 29, 2024). If you have additional evidence of securities law violations, file a formal Whistleblower award claim at sec.gov/whistleblower. The SEC Whistleblower program provides financial awards of 10–30% of sanctions over $1 million. Key statute: Section 10(b) of the Securities Exchange Act (unregistered offering, material misrepresentation — "fixed" returns).
FBI Financial Crimes
Submit at tips.fbi.gov. Relevant statutes: 18 U.S.C. § 1348 (Securities fraud), 18 U.S.C. § 1343 (Wire fraud — Facebook ad + wire transfer solicitation), 15 U.S.C. § 77e (Section 5 — selling unregistered securities). Reference DHS referral letter and SEC TCR #17170-540-879-992.
Utah Division of Securities
File with the Utah Division of Securities (securities.utah.gov). Fox Financial LLC is a Utah entity; state regulators have concurrent jurisdiction over securities fraud, unregistered offerings, and unlicensed broker-dealer activity. The state can act faster than federal agencies for injunctive relief.
DHS / HSI (Already Referred)
Letter sent to Special Agent Luther Selby (DHS/ICE) on May 27, 2024. Follow up to confirm receipt and provide the recorded call transcript (StuartFoxtapedcall.mp3). DHS/HSI has jurisdiction over wire fraud involving interstate wire transfers (the $750,000 Lybrand wire from New York to Utah).
Plain-English Advice for Prospective Investors
Score: 2 / 10 — Elevated Concern. Based on our scoring, it would appear this offering has red flags consistent with cases regulators have, in the past, acted on. While we are not providing a legal conclusion or opinion, independent due diligence is strongly recommended.
This offering scored 2 out of 10 on the Minkow 1–10 scale — the second-lowest possible score. The score is driven by two disqualifying flags and four serious flags, any one of which alone would warrant refusing this investment.
The single sentence that explains this investment: A Utah LLC formed in 2020 is running public Facebook ads promising "18% FIXED ANNUAL INTEREST RETURNS" — a guarantee that no legitimate private real estate investment can make — while appearing to operate without an SEC Form D filing or audited financials.
If you have already invested: preserve all communications, wire receipts, and documents. Contact a securities attorney immediately. Report to the SEC (sec.gov/tcr) and your state securities regulator. Do not wire additional funds.
Disclaimer: This report was prepared using the Barry Minkow 1–10 Risk Score Methodology for educational and investigative due-diligence purposes. It analyzes the language and structure of marketing materials and publicly available information. It does not constitute a factual finding of fraud, legal advice, or a determination of guilt. All factual claims are sourced from documents submitted by the reporting party. Independent verification with primary sources (SEC EDGAR, FINRA BrokerCheck, Utah Division of Corporations, county title records) is required before drawing legal conclusions. This report was submitted to DHS and the SEC in May 2024 and is presented here as a case study in the application of the Minkow methodology. InvestSafe Pro™ · Powered by the Barry Minkow 21-Flag Methodology.