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Serial Fraudster Sentenced for Real Estate Scam

George Gary O'Neal, 71, Anne Arundel County, Maryland, was sentenced by U.S. District Judge Benson E. Legg to 57 months in prison followed by three years of supervised release for wire fraud in connection with three separate fraud schemes. Judge Legg also ordered that O'Neal must forfeit $1 million. Judge Legg scheduled a hearing for May 18, 2012 to determine the amount of restitution to be paid to the victims.

According to O'Neal's plea agreement and other court documents, O'Neal was sentenced in the U.S. District Court for the Eastern District of Virginia in 2001 to 51 months in prison for defrauding investors of more than $1.6 million in connection with a shopping mall redevelopment scheme.

As previously reported by Mortgage Fraud Blog, beginning in 2004, just a few months after his release from prison, O'Neal engaged in a series of fraudulent solicitations and investment scams in Baltimore City, Maryland, regarding the purchase and rehabilitation of row houses. From 2004 to 2006 O'Neal operated from an office space in Annapolis, Maryland, and placed ads in newspapers soliciting investors to purchase Baltimore row houses, which he claimed he would then renovate, lease and/or resell.

According to the indictment, similarly, from 2005 to 2006, using his Annapolis offices as a base, O'Neal solicited investors to buy apartment buildings for condominium conversions in Atlanta, Georgia, as well as soliciting investors to purchase individual units in the buildings. In Atlanta, as in Baltimore, O'Neal misrepresented to the investors, among other things: that he had 30 years experience in real estate sales when in fact he had a federal conviction relating to previous real estate dealings; that the investors would make a profit on their investment, when he knew they would not; and falsely stated that their investment money would be used to purchase, renovate and sell or lease the properties, when in fact O'Neal knew money would be used for unrelated purposes. O'Neal convinced more than 90 people to invest in the condominium redevelopment project.

Finally, while working for an Atlanta roofing company in 2008, O'Neal falsely told customers that his employer was going out of business. O'Neal arranged for the customers to make up front payments to himself and a company he created for the roofing. In addition, O'Neal contacted homeowners in the Atlanta area, falsely telling them that their homes had hail damage from a recent storm. In one to two months, O'Neal collected approximately $75,000 from more than 20 individual homeowners, then failed to provide the promised roofing work, except for one homeowner who received a severely deficient roof.

Losses to the victims resulting from the three schemes total between $1 million and $2.5 million.

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Postal Inspector in Charge Daniel S. Cortez of the U.S. Postal Inspection Service - Washington Division; and Special Agent in Charge Richard A. McFeely of the Federal Bureau of Investigation.

United States Attorney Rod J. Rosenstein thanked the U.S. Postal Inspection Service and the FBI for their work in the investigation. Mr. Rosenstein praised Assistant U.S. Attorneys Harry M. Gruber and P. Michael Cunningham, who prosecuted the case.

This law enforcement action is part of President Barack Obama's Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

The task force identified investment fraud as a leading priority and this case is the result of Operation Broken Trust, a coordinated law enforcement operation that targeted investment fraud throughout the country. Operation Broken Trust is the first nationwide operation of its kind to target a broad array of investment fraud schemes that directly prey upon the investing public. The operation's criminal cases involved more than $8.3 billion in estimated losses and the civil cases involved estimated losses of more than $2.1 billion. In the District of Maryland, the operation's criminal cases involved more than $21 million in losses.

As a part of Operation Broken Trust, federal agencies are making the public aware of resources available to protect against investment fraud and procedures to report fraud allegations. Anyone who wishes to learn more about investment scams, to find out what steps to take to protect against scams, or to report investment fraud should visit the internet website www.StopFraud.gov, which includes links to a wide array of task force member resources, or telephone the Baltimore Field Office of the Federal Bureau of Investigation at (410) 265-8080.

source: Mortgage Fraud Blog

David Saks

Time&Temp Memphis

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Comment balloon 0 commentsDavid Saks • March 21 2012 07:46AM


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