GOP 7th District Candidate Tied to $44 Million Ponzi Scheme Settlement
Paul Wassgren was a defendant in a class action over an alleged $170 million real estate investment fraud.
Paul Wassgren is a Republican running in a four-way GOP primary for outgoing U.S. Rep. Tom Tiffany’s 7th Congressional District seat. Source: Wassgren for Congress website
Republican Paul Wassgren of Ashland is touting his experience as a financial services broker and corporate attorney as he runs against three other GOP candidates in a primary for Northern Wisconsin’s 7th Congressional District. But two years ago, he was involved in a $44 million settlement that ended a class action lawsuit in which investors alleged the Florida-based company Wassgren represented orchestrated a “Ponzi scheme” that raised more than $170 million.
A statement from Wassgren’s campaign blamed “financial ambulance-chaser lawyers” for the suit and settlement, although the initial case was spurred by an earlier U.S. Securities and Exchange Commission, or SEC, investigation.
In 2020, the SEC launched an emergency enforcement action against the Florida-based private real estate firm EquiAlt LLC, along with executives Brian Davison and Barry Rybicki. Wassgren was the company’s attorney.
The SEC complaint alleged EquiAlt raised the $170 million from more than 1,100 investors across the U.S. “through fraudulent unregistered securities offerings.”
“Defendants promised investors that substantially all of their money would be used to purchase real estate in distressed markets in the United States and their investments would yield generous returns,” said the complaint. “Instead, EquiAlt, Davison, and Rybicki misappropriated millions in investor funds for their own personal use and benefit.”
Wassgren’s name isn’t mentioned in the SEC complaint, but he was a named defendant in the subsequent class action lawsuit filed in July 2020 by EquiAlt investors who alleged they collectively lost “millions of dollars in a Ponzi scheme” perpetrated by the company’s founders “acting in concert with Wassgren.” Wassgren was listed as an attorney living in California in the suit. It said he worked with two different law firms based in Miami, Florida. Property records show Wassgren sold a Miami Beach condo for nearly $1.5 million in December 2025 after filing to run for Congress in Wisconsin.
The plaintiffs claimed EquiAlt sold its investments without proper registrations at the state or federal level and money from new investors was used to pay dividends promised to investors who preceded them. The suit alleges Wassgren facilitated contracts on behalf of EquiAlt that he knew weren’t legal.
“Over time, EquiAlt and Wassgren, through integrated offerings of unregistered securities, raised more than $170 million from at least 1,100 investors located in various states, including investors residing in Florida, California, Arizona, Colorado and Nevada. A large percentage of the EquiAlt investors are elderly and many of them invested their life savings in the unregistered EquiAlt Securities.”
Class action lawsuit settled in 2023
In May 2023, a $44 million settlement was reached between the investors, Davison, Wassgren and the law firms he worked with while representing EquiAlt. Wassgren’s campaign indicated the decision to settle was made by the firms’ insurance companies.
The settlement included a bar order, which blocked investors, sales agents who contracted with EquiAlt and others from filing future lawsuits related to the case against one another. It stipulates that it is not “an admission or concession of any violation of any statute or law, of any fault, liability, or wrongdoing” by Wassgren, Davison or Rybicki. The agreement also specifies the settlement doesn’t reflect any “infirmity in the claims” made by plaintiffs.
In a written statement, a spokesperson for Wassgren’s campaign said the Republican is committed to “cracking down on frivolous lawsuits that drive up the cost of health care, insurance, and everyday goods and services for hardworking people in Northern Wisconsin and beyond.”
“These were totally unfounded allegations fabricated by financial ambulance-chaser lawyers to score a quick profit, and those lawyers even acknowledged they could not prove any wrongdoing by Paul,” the statement said.
But Marquette Law School Professor Bruce Boyden told WPR that the size of the settlement — $44 million — is notable.
Boyden said a payment that large could indicate that defending parties in the case thought there was a chance it would go to trial or “it would be so disruptive to their daily activities that it was worth a payment of that amount of money.”
“So, you still can’t conclude that they necessarily thought that they were going to lose, but the higher the settlement value, the more likely it is that they were thinking, there’s some chance we might lose a trial, and therefore we should pay some amount of money now to stop this case,” Boyden said.
In an article last month in the Ashland Daily Press, Wassgren’s campaign said the settlement’s bar order limiting future lawsuits was rare, and a sign the case lacked merit. But Boyden said those orders aren’t unusual and are aimed at preventing defendants from suing one another after a settlement is reached.
“They’re fairly common in large class action suits against multiple defendants, and they’re actually required for courts to enter one when a defendant settles a securities fraud lawsuit,” said Boyden.
Wassgren has self-funded campaign for 7th Congressional District
As he competes to represent Wisconsin’s largest congressional district, Wassgren faces three other Republicans in the August primary, including Michael Alfonso, U.S. Transportation Secretary Sean Duffy’s son-in-law, who was recently endorsed by President Donald Trump. Also running in the primary are Jessi Ebben and Kevin Hermening.
During the last three months of the campaign, Wassgren reported raising $1.6 million. Of that, $1.5 came from a personal loan to his campaign. The haul put Wassgren in the fundraising lead, but Alfonso is getting outside help from a political action committee that spent around $1.2 million on his behalf. The PAC received $1 million from Duffy’s congressional campaign.
Wisconsin GOP congressional candidate named in $44M settlement of alleged ‘Ponzi scheme’ lawsuit was originally published by Wisconsin Public Radio.
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