Man Indicted for Foreclosure Investment Scheme

Allison Tussey —  December 7, 2012 — Leave a comment

Robert Rinehart, 49, Santa Cruz, California, was indicted by a federal grand jury and charged with eight counts of wire fraud.

According to the indictment, Rinehart is alleged to have stolen $500,000 from investors who believed they were investing in his company, Argento Development Group. Investors believed that their investments would be used to fund the purchase, improvement and resale of foreclosed properties; however, the defendant allegedly stole investors’ funds and used them to pay for his personal living expenses.

Rinehart made his initial appearance in federal court in San Jose, California, before Magistrate Judge Cousins. Rinehart was released on a $50,000 bond. He is scheduled to make his initial district court appearance on Jan. 16, 2013, before United States District Court Judge Lucy H. Koh.

The maximum statutory penalty for each count of wire fraud, in violation of Title 18, United States Code, Section 1343, is 20 years in prison and a fine of $250,000 or twice the gross gain or gross loss from the offense, plus restitution. However, any sentence following conviction would be imposed by the court after consideration of the United States Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. • 3553.

Please note, an indictment contains only allegations against an individual and, as with all defendants, Rinehart must be presumed innocent unless and until proven guilty.

United States Attorney Melinda Haag announced the indictment.

Jeff Schenk is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Kamille Singh. The prosecution is the result of an investigation by the Federal Bureau of Investigation.

The announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.

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Allison Tussey

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