Real Estate Investor Sentenced to 3 Years for Fraud

Allison Tussey —  February 16, 2012 — Leave a comment

Richard Pettibone, 44, formerly of Alexandria, Virginia, pleaded guilty to operating a $1.5 million real estate investment Ponzi scheme and was sentenced to 36 months in prison, followed by three years of supervised release.

According to court documents, between 2002 and 2006, Pettibone operated Benten Investors, which Pettibone advertised as an investment company in the real estate and private lending market. Pettibone received at least $2 million from investors based on lies and misrepresentations regarding the use of investors’ funds, the investment risk, and the amount of return on the investment, including that investors would earn guaranteed profits. Pettibone also caused to be sent IRS documents and fake monthly account statements designed to lull investors into a false sense of security regarding the use of investors’ funds and the company’s profitability.

In reality, Benten Investors was not profitable and Pettibone used investors’ funds for personal purposes including, but not limited to, the maintenance of a yacht, the payment of credit card bills, and the purchase of real estate. Pettibone concealed his personal use of investors’ money in part by buying assets in the names of his associates. As a result of Pettibone‘s fraudulent conduct, investors lost approximately $1.5 million.

According to court documents, as the scheme collapsed, Pettibone wired $530,000 from Benten Investors accounts and fled to Costa Rica, where he was eventually apprehended and later extradited to the United States. At sentencing, the United States and the defendant jointly recommended a sentence of 36 months in prison in addition to approximately 11 months Pettibone spent incarcerated in Costa Rica during extradition.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia, and James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after the plea was accepted by United States District Judge James Cacheris.

This investigation was conducted by the FBI’s Washington Field Office with assistance during extradition from the U.S. Department of Justice Office of International Affairs, Organismo de Investigacion Judicial, and the Regional Security Office at the U.S. Embassy in Panama. Assistant United States Attorney Uzo Asonye prosecuted the case on behalf of the United States.

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Allison Tussey

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