Investor Receives 4 Year Sentence for Illegal Flipping Scheme

Allison Tussey —  April 29, 2015 — 1 Comment

Benny Chetcuti, Jr., 60, Walnut Creek. California, was sentenced to 51 months in prison, and ordered to pay $21,823,526.10 in restitution, as well as forfeit $3,968,995 in proceeds obtained from a multi-year real estate investment fraud scheme.

Chetcuti pleaded guilty on October 21, 2014, to two counts of wire fraud. According to the plea agreement, Chetcuti admitted that between 2007 and 2010, he defrauded private investors who loaned him money under the belief that their loans were backed by equity in real property. In fact, Chetcuti misrepresented aspects of many of the loans including how much equity was available to secure the loans, the amounts and seniority of loans already tied to the properties, and how the loans were used. He also misled investors about whether their loans were recorded through deeds of trust.

Chetcuti was indicted by a federal grand jury on March 27, 2014. According to the indictment, Chetcuti operated a real estate investment firm, Chetcuti & Associates, since 1998. Chetcuti & Associates was in the business of purchasing and flipping homes for resale after renovation and was funded in large part by loans from private individuals. To carry out his scheme, Chetcuti used a variety of tactics to misrepresent the equity that supposedly backed his loans. Among the tactics he used were forging deed recordings, forging letters supposedly written by institutional lenders and title company officers, and directing others to impersonate escrow officers. The indictment charged Chetcuti with two counts of wire fraud in violation of 18 U.S.C. § 1343.

The sentence was handed down by the Honorable Jeffrey S. White, U.S. District Judge. The Court found that Chetcuti’s fraudulent scheme caused more than $3.9 million in losses, attributable to 21 victims. In addition, the Court ordered Chetcuti to pay more than $21.8 million in restitution for the losses his real estate investment business caused. The Court also sentenced the defendant to a three-year period of supervised release and explicitly barred him from participating in any real estate, banking, or lending-related activities. The defendant was ordered to self-surrender to federal authorities on June 4, 2015, at which time he will begin serving the sentence.

United States Attorney Melinda Haag and FBI Special Agent in Charge David J. Johnson announced the sentence.

Assistant U.S. Attorney Andrew S. Huang is prosecuting the case with the assistance of Vanessa Quant and Yvette Baird. The prosecution is the result of a multi-year investigation by the Federal Bureau of Investigation. The U.S. Department of Labor, Employee Benefits Security Administration also assisted with the investigation.

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Allison Tussey

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One response to Investor Receives 4 Year Sentence for Illegal Flipping Scheme

  1. I don’t understand. This man gets 51 months, a little over 4 years for stealing $21.8MM. An earlier story had a man getting between 8 and 20 years for stealing $11,500 from homeowners.
    Why so little for so much more?

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