Bankrupt Realtor's home: Big wow factor

ALBUQUERQUE (KRQE) - A trustee handling the bankruptcy estate of Albuquerque Realtor of Doug Vaughan is scrambling to come up with millions of dollars to pay back hundreds of people who lost their investments in an alleged Ponzi scheme.

But now we may know where a lot of that money went. Take a tour of Vaughan's ostentatious home in Tanoan's gated community on the golf course and you'll see why. It's up for sale for $2.5 million.

"It's a really cool house," said Kelly Hardison, a real estate agent with Caldwell Banker Legacy. "You don't walk in and say, 'Oh cute.'

"There's a big wow factor."

Taking a look inside from the Caldwell Banker Legacy's website and you will get a virtual tour of the nearly 6,900-square-foot, four-bedroom house. Vaughan still lives in the house, and he's still enjoying all the over-the-top furnishings inside.

"It's very expensive furniture. It's very, very nice furniture. High, high quality," Hardison said.

Vaughan has large leather chairs, a pool table, granite throughout the house and a 400-bottle wine room. But don't pass up the Italian marble tile in the front entry or the pool, two hot tubs or cabana outside. There are wood ceilings and floors, and don't forget the full-size, standing glass chess set.

Vaughan built the home in 2007 when his real estate business appeared successful and his alleged Ponzi scheme was in full swing. From the details in the home and the furnishings, you feel like he's almost flaunting his money. His Vaughan Company Realtors logo can be found outside the cabana and on a stone table.

The trustee is trying to sell off his 18 properties, including his personal house. That money will go to his 600 creditors.

In a complaint filed earlier this year the federal Securities and Exchange Commission described Vaughan's investment program as a classic Ponzi scheme promising unusually high returns for investors. Instead money supplied by later investors was used to pay dividends to early investors, according to the SEC.

The SEC also claimed Vaughan reaped as much as $80 million from his investors, an amount 20 times the value of the property backing promissory notes he signed.

Under bankruptcy law, Vaughan can keep all the furniture inside the house, which could be worth an estimated $2 million. He also will probably get to stay in the house for a while. The last time a home sold for over $2 million in the metro market was in August 2008.

The SEC complaint against Vaughan is a civil action alleging he improperly dealt in securities and investments. Vaughan has not been charged with a crime although state and federal agencies are cooperating in a criminal investigation.