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Tag: real estate Ponzi schemes

  • 2 South Florida Sisters Charged In Alleged Ponzi Caper Reportedly Married To Foreclosure-Rescue Businesses

    Sisters Odalis Freixa (left) and Marisela Gamez have been charged in an alleged Florida Ponzi caper. Photo source: Booking photos at Miami-Dade Corrections and Rehabilitation Department.

    South Florida sisters Odalis Freixa and Marisela Gamez are listed as inmates held by the Miami-Dade Corrections and Rehabilitation Department on charges of grand theft, organized scheme to defraud and conspiracy.

    Freixa is 48, according to jail records. Gamez is 49.

    Citing Miami-Dade Police documents, NBCMiami is reporting that investigators believe the alleged scam was a Ponzi operated through foreclosure-rescue businesses.

    Freixa is the alleged mastermind, the site reported.

    From NBCMiami (italics added):

    Police say Freixa, the mastermind of the scheme, conducted community outreach seminars and wrote a book titled “The American Dream It’s Not Forgotten” in order to educate consumers of the options homeowners have in dealing with foreclosures and loan modifications.

  • PONZI NOTES: (1) Kansas Lawyer Allegedly Ran Scheme Out Of Trust Accounts And Scammed Intended Beneficiaries, Including Clients’ Children And Grandchildren And Prominent University, Feds Say; (2) Former Texas Attorney Pleads Guilty In $7.8 Million Caper

    Yesterday was another bad day for the legal profession’s noble members: They once again had to bear headlines about fraud schemes allegedly operated by colleagues past and present.

    In Kansas, attorney Robert M. Telthorst, 52, of Topeka, was charged with wire fraud and money-laundering amid allegations he ran a Ponzi scheme for all or parts of seven years with clients’ trust accounts.

    After a man identified in court documents as “Otto K.” died, Telhorst was appointed to administer payments to two of the man’s daughters and entrusted with $463,344, prosecutors said.

    One of the daughters was to receive a lump sum, the other a monthly allotment, prosecutors said.

    In the trust for the daughter who was to receive monthly income, “the balance dropped from more than $208,500 to less than $150 after Telthorst removed most of the funds for his own benefit,” prosecutors said.

    Separately, Telthorst scammed three granddaughters of a client by raiding their educational trusts that had been set up with $10,000 each.

    “He depleted all three trusts, leaving them each with balances of less than $350,” the office of U.S. Attorney Barry Grissom of the District of Kansas said.

    Beyond that, two other clients had set up an $80,000 trust to benefit the Business School at the University of Kansas.

    “The balance in the account dropped to less than $1,750 after Telthorst diverted funds to his own benefit,” prosecutors said.

    Assisting in the Telthorst probe were the the FBI and the Shawnee County District Attorney’s Office, prosecutors said.

    Meanwhile, former attorney Billy Frank Davis of Houston pleaded guilty to wire fraud in a case that alleged he held himself out as a real-estate professional for 10 years but actually was running a Ponzi scheme with “a substantial portion of the funds he solicited.”

    “Davis admitted to using a variety of ploys to perpetuate his Ponzi scheme, all of which involved falsely representing to investors the existence or nature of various real estate investment opportunities, accepting funds from investors under such false pretenses, and then using the investor funds in a manner other than as represented to investors,” the office of U.S. Attorney Ken Magidson of the Southern District of Texas said.

    Davis, also known as Bill F. Davis, is 67. The scheme fetched $7.8 million, prosecutors said.

    Sentencing is scheduled for Jan. 11 before U.S. District Judge David Hittner. Davis faces up to 20 years in federal prison, and the FBI led the probe, prosecutors said.

  • Recidivist Huckster, 63, Found Guilty In $30 Million Ponzi Scheme Based In Colorado; Philip R. Lochmiller Sr. Wiped Out Investors After Earlier Serving 3 Years In California Prison For Securities Fraud

    UPDATED 8:57 P.M. EDT (U.S.A.) Philip R. Lochmiller Sr., 63, has been found guilty of money-laundering, mail fraud and conspiracy in federal court in Colorado.

    The jury returned the verdict in three hours, after a 10-day trial, the office of U.S. Attorney John Walsh of the District of Colorado said.

    Lochmiller spent three years in a California state prison for a securities swindle in the 1980s, according to records. The California scheme involved about $5 million. Two decades later, a new Lochmiller real-estate scheme evolved in Colorado, involving about $30 million, prosecutors said.

    A final restitution sum has not been calculated. Lochmiller potentially faces decades in federal prison.

    The “verdict is a victory for the over 400 victims in this case, many of whom are from the Grand Junction area,” Walsh said.

    Lochmiller was associated with firms known as Valley Mortgage Inc. and Valley Investments. Investors were promised returns of up to 18 percent, prosecutors said.

     

  • BULLETIN: Las Vegas Man, 70, Arrested In Alleged Ponzi Scheme Targeting Fellow Senior Citizens; Hans P. Seibt Booked Into Clark County Jail; State Charges Him With 25 Counts Of Securities Fraud, 6 Counts Of Theft

    BULLETIN: The Ponzi cavalcade involving senior citizens continues . . .

    Nevada state authorities have arrested Hans P. Seibt of Las Vegas on Ponzi charges. He specifically was charged under state law with 25 counts of securities fraud and six counts of theft, amid allegations he targeted senior citizens.

    At 70, Seibt himself is a senior citizen. He was booked into the Clark County Jail, and is being held without bail.

    Seibt is expected to make a court appearance Monday, according to Clark County records.

    “Targeting senior citizens is particularly egregious,” said Nevada Attorney General Catherine Cortez Masto.

    The office of Nevada Secretary of State Ross Miller described Seibt’s alleged crimes as a real-estate Ponzi swindle affecting investors in Nevada and “several other states.”

    “So-called interest payments or distributions that are paid to some investors aren’t a guarantee that an investment is legitimate,” Miller said. “That’s the whole basis for a Ponzi scheme. Potential investors just can’t be careful enough, especially in the current economic environment.”

    Investors were promised returns of between 10 percent and 12 percent, but Seibt duped them, investigators said.

    “Seibt successfully solicited investments of $10,000 or more from his victims, offering them trust deeds, joint venture agreements, and subscription agreements, all of which were supposedly secured by parcels of land Seibt was holding in Nye County,” investigators said.

    But the value of the land was “grossly exaggerated in order to support Seibt’s claims to his victims,” investigators said.

    And Seibt also didn’t purchase the land as advertised. Instead, he “used the money to pay off other investors and for personal use,” investigators said.

    Seibt did business as HSLV Development Corp., and Clark and Nye County Development Corp., investigators said.

  • PROSECUTORS: California Man Hatched Ponzi Scheme And ‘Trust’ Scams — And Ripped Off His Elderly Mother’s Social Security Benefits After She Went Missing

    A California man has pleaded guilty to hatching a real-estate Ponzi scheme, transferring a property acquired in the scheme to two “trust” accounts and cherry-picking his 82-year-old mother’s Social Security benefits after she went missing in January 2009.

    William Warren Baker, 59, of Laguna Nigel, now faces up to 10 years in state prison, prosecutors said.

    The Ponzi, which raised more than $900,000 and targeted people of faith, was discovered by the Orange County Sheriff’s Department after Baker’s mother vanished, the office of Orange County District Attorney Tony Rackauckas said.

    Sara Jo Mowery, Baker’s mother, still hasn’t been found. Prosecutors said that, under federal law, Social Security benefits “are to cease being provided to any beneficiary until the missing person is found or pronounced deceased.”

    Baker was accused of “stealing” the Social Security funds. How they were distributed was not immediately clear.

    During the Ponzi probe, sheriff’s investigators discovered Baker “had set up a previously undiscovered joint bank account” into which Mowery’s Social Security benefits were deposited.

    “After his mother’s disappearance, Baker began illegally withdrawing the funds from that account, stealing $6,100 in all,” prosecutors said.

    All in all, Baker pleaded guilty to 13 felony counts of using untrue statements in the purchase or sale of securities and one felony count of grand theft from the Social Security Administration. Special sentencing enhancements are in effect because of the size of the overall theft, which is considered an “aggravated white collar crime.”

    Baker recruited investors by telling them he’d buy, refurbish and flip real estate at a profit, prosecutors said.

    But it was just a lie designed to separate church friends and others from their money, prosecutors said.

    Indeed, prosecutors said, Baker “failed to purchase a property to be renovated and flipped as promised to his investors.

    “Baker instead purchased a property for himself and transferred the property into a trust belonging to his son,” prosecutors continued. “He later transferred the property into a trust belonging to his wife. Baker used investor money for personal expenses or to pay back old investors from previous ventures.”

    Any person with information about the whereabouts of Mowery, who went missing more than two years ago and now would be 84, is asked to contact the Orange County (Calif.) Sheriff’s Department or their local police department.

  • 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.