Property Flipper Admits Deceiving Investors
John Wesley Martynec, 36, Long Beach, California, was convicted of stealing $302,000 from investors by fraudulently promising to buy and re-sell foreclosed homes for a profit.
Martynec pleaded guilty to two felony counts of grand theft, one felony count of untrue statements in connection with a purchase or sale of securities and the use of a scheme to defraud, one felony count of financial exploitation of an elder, and a sentencing enhancement for property loss exceeding $200,000. Martynec faces a maximum sentence of three years in state prison at his sentencing June 8, 2012, at 9:00 a.m. in Department C-5, Central Justice Center, Santa Ana.
As previously reported by Mortgage Fraud Blog, between August 2009 and August 2010, Martynec stole $302,000 from four investors, Patrick L. and Howard H., both 78, Howard H.'s son Michael H., and Chris L. The defendant told these investors that he had 10 years of experience in buying and flipping foreclosed homes for a profit. Martynec received money from investors under the pretense that it would go towards buying distressed homes. He did not purchase any property, contrary to what he promised his investors.
On Aug. 27, 2009, Martynec received $29,500 from Patrick L. and Michael H. after showing the victims a property. The defendant took an additional $63,000 from Michael H. to purchase another property. Martynec took a total of $92,500 from Michael H. The defendant also received $10,000 from Howard H.
In February, March and July of 2010, Martynec received a total of $70,000 from Patrick L. under the guise of purchasing other properties, which were never purchased. Martynec took a total of $99,500 from Patrick L. The defendant met Chris L. through Patrick L.
On May 13, 2010, Martynec received $60,000 from Chris L. and an extra $40,000 on Aug. 18, 2010, under the guise of purchasing properties that were never purchased, taking a total of $100,000 from the victim.
Martynec issued falsified documents including deeds of trust, fabricated investment summaries and 1099 interest statements to his four investors.
On Sept. 13, 2010, Michael H. questioned Martynec about the investment summaries he was receiving and discovered they were fabricated. Martynec was reported to the Seal Beach Police Department, who subsequently began an investigation.
Deputy District Attorney George McFetridge of the Major Fraud Unit is prosecuting this case.
source: Mortgage Fraud Blog