Principal Life Insurance Company
Tracking Number: 20241005-0002
Subject: Subject: Whistleblower Report—Securities and Mortgage Fraud at 104 West 40th Street, New York City
Submitted By: Dennis R. Myhre, AIC
Date: October 5, 2024 (Original Submission)
Affected Parties: 401(k) Plan Investors in Principal U.S. Property Separate Account (PUSPSA)
To Whom It May Concern:
I am submitting this whistleblower report to bring attention to potential securities and mortgage fraud involving the commercial property located at 104 West 40th Street, New York City.
In 2007, the property was acquired by Principal Real Estate Investors on behalf of the Principal U.S. Property Separate Account (PUSPSA) through a joint venture for an acquisition price of $141,400,000. At the time of the purchase, the outstanding mortgage balance on the property was $34,911,545.95, suggesting that the cash investment by PUSPSA totaled approximately $106,488,455, assuming the debt was included in the purchase price.
Two years later, in 2009, Principal reported the Gross Asset Value (GAV) of the property to be $55,000,000, a significant decrease from the original acquisition price. In 2010, the property was re-sold for $62,200,000, again substantially lower than the initial purchase price, despite market conditions that did not justify such depreciation. The remaining mortgage debt at the time should have been a portion of the reported value as well.
This pattern—where Principal Real Estate Investors sell PUSPSA-owned properties at deeply discounted prices shortly after acquisition—raises concerns about valuation accuracy, fiduciary responsibility, and potential fraudulent activities. The transactions involved a substantial discrepancy between purchase and resale values, with no reasonable financial justification provided.
Given these irregularities, I urge the Department of Justice to investigate these transactions for potential violations related to securities fraud, mortgage fraud, and misrepresentation of asset values. I am prepared to provide any supporting documentation necessary to assist in this investigation.
Please advise on the next steps regarding this report and any further information needed.
Sincerely,
Dennis Myhre, AIC
