Archives For Ponzi Scheme

A father and son schemed with a Chicago attorney and a Lincolnwood businessman to sell $2.9 million in phony mortgages to more than a dozen duped investors, according to a federal indictment.

Albert Rossini, 67, the owner of Devon Street Investments Ltd., Lincolnwood, Illinois plotted with Babajan Khoshabe, 74, Chicago, Illinois, and Khoshabe’s son, Anthony Khoshabe, 33, Skokie, Illinois, to fraudulently induce at least 15 victims into purchasing purported mortgage notes on apartment buildings in foreclosure, according to the indictment. The trio promised that investors would receive rental income from occupants of the buildings, followed by title to the properties at the conclusion of the foreclosure process, the indictment states. In reality, it was a ponzi scheme.  the trio did not own the mortgage notes, and instead used the victims’ funds to make Ponzi-type payments to other investors and pocket the rest, according to the indictment. Continue Reading…

William Donnelly Yotty, 69, who currently resides in Monarch Beach, California but during the course of the scheme lived in Lodi, California, pleaded guilty to the federal mail fraud and wire fraud charges for operating a Ponzi scheme that featured false promises of large returns to victims who invested in debt obligations and distressed real estate.

In a plea agreement filed in United States District Court, Yotty admitted that he ran several Lodi-based companies that offered bogus investments in corporate debt obligations and in distressed real estate that he and his salespeople said could be “flipped” for substantial profit. Continue Reading…

Michael J. Stewart, 68, San Clemente, California, the CEO of a now-defunct Southern California real estate investment firm, was found guilty of 11 counts of mail fraud following a nine-day jury trial before United States District Judge Cormac J. Carney.  The charges arose out of a real estate scheme that ended with the bankruptcy of the company and hundreds of investors collectively losing as much as $169 million.

Stewart owned and was the chief executive of Pacific Property Assets (PPA), which had offices in Long Beach and Irvine, California. Along with co-defendant John Packard, Stewart created PPA in 1999 to purchase, renovate, operate, and resell or refinance apartment complexes in Southern California and Arizona. Typically, PPA financed property acquisitions through mortgages, and it raised money from private investors to pay for renovations to the properties. After several years, PPA would refinance (or sometimes sell) each property. Continue Reading…

Trial Continues in Case Against Real Estate Firm Co-Owner Accused of Ponzi Scheme

The trial of a Phoenix man accused of setting up a real estate Ponzi scheme during the Great Recession continued in Santa Ana on Tuesday.

According to federal prosecutors who spoke with jurors at court, Michael J. Stewart—a co-owner of a real estate firm based in Irvine and Long Beach—set up the Ponzi scheme to pay off old investors while continuing to recruit new ones for a plan to flip distressed apartment buildings during the Great Recession’s housing collapse.

Stewart’s attorney told jurors that in fact his client was innocent and thought his plan was financially prudent because homeowners who lost their property in foreclosure would need to rent apartments.

Randy Poulson, 44, Woolwich Township, New Jersey admitted scamming distressed homeowners into giving him their houses and then soliciting fake real estate investments from private investors – secured by those same properties – that netted him more than $3 million in illicit profits.  He pled guilty to Count One of an indictment charging him with mail fraud.

According to documents filed in the case and statements made in court: Continue Reading…

Brenda Ashcraft, 45, Milford, Ohio, pleaded guilty in U.S. District Court to defrauding investors of at least $15 million between 2009 and 2013 in a fraudulent investment scheme to purchase and sell real estate through real estate investment trusts (REITs).

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Abbe Edelman, 51, Livingston, New Jersey, was sentenced to 135 months in prison for running a real estate investment scheme that bilked victims out of more than $5 million.

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Barry J. Graham, 59, and Ricky Lynn Stokes, 54, both of Ft. Myers, Florida, were sentenced to 60 months imprisonment, followed by three years of supervised release, for promising to develop dilapidated properties into luxury resorts as well as an upfront leaseback payment at the time of closing, but failed to disclose the leaseback payment and other financial inducements to the borrowers, on paperwork submitted to lenders.

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Joel Wilson, 32, Saginaw, Michigan, was convicted by a jury on nine felony charges for his role in an extensive Michigan Ponzi scheme wherein he defrauded hundreds of Michigan victims out of millions of dollars. In January 2014, extradition efforts were initiated to retrieve Wilson from Germany after he was on the lam in Europe for more than a year.

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John Reid Perkins, 45, Charlotte, North Carolina, was sentenced by U.S. District Judge Max O. Cogburn, Jr. to serve 64 months in prison followed by three years of supervised release on securities fraud conspiracy charges and for violating the terms of his supervised release stemming from a previous federal conviction.

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