Long Prison Terms Ordered In California Ponzi Scheme Cases In Which Operators Threatened Or Attempted Suicide; Roberto Heckscher Gets 20 Years; Patricia Morgen Gets Nearly 16 Years

EDITOR’S NOTE: This is a brief on two Ponzi cases in California that led to suicide attempts or threats. Among other things, the case of Roberto Heckscher demonstrates both the danger to life that collapsing Ponzi schemes pose and the fallacy that no Ponzi scheme exists as long as people are getting “paid.” The fallacy routinely is perpetuated on Internet Ponzi boards such as MoneyMakerGroup, TalkGold, ASAMonitor and MyCashForums. Indeed, the Heckscher investment-fraud and Ponzi scheme dates back to at least 1979, perhaps making it the longest-running scheme on the Feds’ radar screens. Meanwhile, the Ponzi case against Patricia Morgen and Chicago Development and Planning also mixes in elements of mortgage fraud. Among other things, the Morgen case demonstrates that Ponzi = Pain. Indeed, Morgen initially fled to Mexico when she came under investigation. She later returned — and threatened to jump from the top of a multistory building in Chicago.

Two Ponzi schemers whose cases were brought in federal court in Northern California have been sentenced to long prison terms. The unrelated cases of Roberto Heckscher and Patricia Morgen destroy myths, expose secret lives and demonstrate that Ponzi schemes can separate purveyors from their senses.

Roberto Heckscher, 55, projected himself during the business week as a mild-mannered accountant and strategist who served elderly and middle class clients in the San Francisco area. On weekends, however, he morphed into a Las Vegas gambling “whale” treated to the best amenities by the casinos.

Heckscher conned family, friends and clients into providing money that purportedly would be used to provide short-term commercial loans to clients. Investors were told they’d earn interest on the loans.

The scheme, which gathered up to $100 million, dated back to 1979, prosecutors said. At least 292 investors lost a total of at least $52 million in the scheme.

“For nearly three decades, Roberto Heckscher made his livelihood by stealing the hopes and dreams of the people he knew,” said U.S. Attorney Joseph P. Russoniello.

Heckscher’s sentence of 20 years for mail fraud “should send a strong message to everyone” that “preying on the trust of hardworking people for personal gain will land you in prison,” Russoniello said.

But Heckscher almost did not live to see the long-running scheme exposed in the plain light of day. That’s because he tried unsuccessfully to kill himself in June 2009 by overdosing on sleeping pills.

U.S. District Court Judge Susan Illston handed down the sentence. Heckscher, who owned Irving Bookkeeping & Taxes, was charged criminally and pleaded guilty in October 2009, about four months after he tried to take his own life.

Patricia Morgen, meanwhile, was sentenced to 15 years and eight months in prison after admitting she created a real-estate Ponzi scheme that solicited investors for Chicago Development and Planning. She also was ordered to pay more than $9 million in restitution. The case has more than 400 victims.

Investors were promised “substantial, guaranteed return profit payments,” prosecutors said.

In addition to the real-estate Ponzi scheme, Morgen also engaged in mortgage fraud, prosecutors said.

“Morgen and a co-defendant submitted fraudulent loan applications to acquire more than 20 properties, most of which were occupied, rent-free, by Chicago Development and Planning employees, including Morgen herself,” prosecutors said.

Morgen, 63, initially fled to Mexico. She was indicted in November 2008. Although she later returned to the United States, Morgen hid from authorities.

She was arrested in Chicago in June 2009, after threatening to jump off a multistory building, prosecutors said. Her son, Shalom Gibson, was indicted in Nevada for destroying evidence in the case, and remains at large.

U.S. District Judge Charles R. Breyer sentenced Morgen, who pleaded guilty in December 2009 to wire fraud, mail fraud, and money-laundering.  Breyer described Morgen as “a very dangerous person,” prosecutors said.

The sentence “underscores the severity and impact of this sort of crime on our entire community,” said Stephanie Douglas, FBI special agent in charge.

“Ms. Morgen betrayed the trust of hundreds of investors, injected bad debt into the economy, and fled the country when faced with the prospect of being held accountable for her actions,” Douglas said.

Greedsters running investment-fraud schemes have plenty to worry about, said an IRS criminal investigator.

“Your greed will not go undetected and unpunished,” said Scott O’Briant, special agent in charge of the IRS-Criminal Investigation unit.

In recent weeks, at least three suicide attempts by Ponzi schemers have been outlined in federal cases.

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One Response to “Long Prison Terms Ordered In California Ponzi Scheme Cases In Which Operators Threatened Or Attempted Suicide; Roberto Heckscher Gets 20 Years; Patricia Morgen Gets Nearly 16 Years”

  1. It’s worth remembering that there were a number of suicides associated with the Madoff scam which also went on for about 20 years.
    http://news.bbc.co.uk/1/hi/business/7798533.stm

    Rene-Thierry Magon de la Villehuchet, 65, was found sitting at his desk with both wrists slashed, New York police spokesman Paul Browne said.

    http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article5720211.ece

    Bernard Madoff, the disgraced financier accused of the biggest fraud in corporate history, was accused of having “blood on his hands” after a former soldier killed himself over the loss of his family’s life savings.

      (Quote)

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