1 Sentenced, 1 Pleads Guilty to Real Estate Investment Scams

Allison Tussey —  December 15, 2010 — Leave a comment

Michael James Burns, Jr., 51, San Francisco, California, was sentenced on October 8, 2010, to serve 87 months in prison, 3 years supervised release upon release from incarceration and restitution of $445,532.45, following his guilty plea to wire fraud and money laundering. Burns created a company, BMJ Capital to allegedly finance various business projects. Burns entered into an agreement with Strategic Land Company, LLC, to fund a real estate development project in Lakeside, Montana. Burns promised to invest more than $30 million in the development if the company could first provide a 1% up front commitment fee of $250,000. The company, encouraged in part by false financial documents, wired the money to Burns. Burns never provided any financing to the company and never returned the advanced fee. A financial analysis of BMJ Capital‘s records revealed that BMJ collected hundreds of thousands of dollars from individuals and businesses between 2007 and 2008. At the time, Burns was on parole for a similar offense in Hawaii.

The case was investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney Ryan M. Archer.

Kenneth A. Schneider, 57, Weston, Connecticut, pled guilty on November 30, 2010, to wire fraud. Schneider is scheduled to be sentenced on March 10, 2011.

Schneider pled guilty to engaging in a fraudulent business in which he claimed to specialize in problematic and opportunistic commercial direct bridge loan funding. Schneider claimed to be capable of funding large dollar, hard money loans to individuals or entities wishing to borrow against a parcel or parcels of real property. In reality, Schneider entered into agreements with clients and took their commitment fees and application fees with no intention of ever providing funding to any of the victims that he encountered. The United States estimates that Schneider swindled in excess of $1.5 million from approximately 130 victims nationally. Included among those victims are two residents of Missoula County and one resident of Ravalli County, who combined to pay Schneider $37,750 in application and commitment fees for a loan that never closed.

The case was investigated by the U.S. Secret Service and prosecuted by Assistant U.S. Attorney Timothy J. Racicot.

 

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Allison Tussey

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