David Saks: Real Estate Developer Sentenced to 27 Months in Prison for Bank Fraud

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Real Estate Developer Sentenced to 27 Months in Prison for Bank Fraud

Vincent J. Garcia Sentenced to 27 Months in Federal Prison on Bank Fraud Conviction
Albuquerque Real Estate Developer also Ordered to Pay $722,543.76 in Restitution

U.S. Attorney’s Office April 26, 2013
  • District of New Mexico (505) 346-7274
 

ALBUQUERQUE—Albuquerque real estate developer Vincent J. Garcia, 61, was sentenced this afternoon to 27 months in federal prison followed by five years of supervised release for his bank fraud conviction. Garcia also was ordered to pay $722,543.76 in restitution to the banks that were the victims of his criminal conduct. Garcia is required to surrender himself to a federal correctional institution to be designated by the U.S. Bureau of Prisons within 60 days to begin serving his prison sentence.

Garcia’s sentence was announced by U.S. Attorney Kenneth J. Gonzales; Gabriel L. Grchan, Acting Special Agent in Charge of the Phoenix Field Office of IRS-Criminal Investigation; David Anderson, Special Agent in Charge of the Kansas City Region of the Federal Deposit Insurance Corporation (FDIC), Office of Inspector General; and Carol K.O. Lee, Special Agent in Charge of the Albuquerque Division of the FBI.

Garcia pleaded guilty in August 2011 to count three of a 19-count superseding indictment charging him and co-defendants Derek Barnhill, 48, formerly of Rio Rancho, and David Garcia, 36, of Albuquerque, with bank fraud and money laundering charges in connection with three real estate development projects, including the Anaszai Downtown LLC (Anasazi Building). In entering his plea, Garcia admitted committing bank fraud in the amount of $365,677 and acknowledged that the gross loss amount to the victims of his fraudulent activity was $842,237.44.

Garcia admitted executing a plan to obtain funding from the Columbian Bank & Trust Co. (the bank) by having Barnhill submit a bank construction loan drawn-down request containing a material misrepresentation.

Garcia then used $360,000 in construction loan proceeds to invest in a casino in Washington State. To obtain these funds, Garcia had Barnhill submit a construction loan draw-down request in the amount of $365,677 to the bank on February 12, 2007.

The draw-down request falsely stated that the funds were needed for “materials and price lock” for construction services to be provided by a specific company.

Garcia also admitted instructing Barnhill to draw down the construction loan knowing that the funds would not be directly utilized in the construction of the Anasazi Building.

In requesting that Barnhill submit the draw-down request, Garcia knew that the request would falsely represent that the money would be used for a direct construction expense.

In his plea agreement, Garcia stated that his company engaged his son, co-defendant David Garcia, to act as the general contractor for the Anasazi Building and the other real estate development projects and that David Garcia was compensated in the form of labor and materials for construction work on his personal residence.

Garcia admitted submitting invoices for work performed on his son’s residence to the bank and to the First Financial Credit Union and manipulated the invoices to appear to be direct expenses for his real estate development projects.

Garcia asserted that David Garcia was not aware that the invoices for work performed and labor provided at his residence were being submitted to the banks as direct project expenses.

In December 2010, Barnhill entered a guilty plea to count three, a bank fraud offense, and count ten, a money laundering offense, of the superseding indictment. In his plea agreement, Barnhill provided a more expansive description of the bank fraud to which Garcia entered his guilty plea. To that end, Barnhill said that, on February 12, 2007, Garcia told Barnhill that he needed $360,000 for a “good faith payment” towards the purchase of a casino.

Garcia asked Barnhill to use an old bid for sheet rock for the Anasazi Building to get the money.

Barnhill altered the sheet rock bid to support a fictitious draw-down request for $365,677 and submitted the request based solely on the false invoice to the bank.

After the bank disbursed the money, Barnhill transferred the funds to an Anasazi account at New Mexico Bank and Trust. The next day, Garcia and Barnhill went to New Mexico Bank and Trust and withdrew $360,000 of the proceeds and the money at Compass Bank in an account in the name of Albuquerque Downtown Partners.

Thereafter, Garcia flew to Washington State with a Compass Bank check for $360,000 to make a payment on the casino.

In entering his guilty plea, Barnhill did not implicate David Garcia in the criminal conduct charged in the superseding indictment. The charges against David Garcia subsequently were dismissed.

Barnhill faces up to 20 years of imprisonment, a maximum $1,000,000 fine, and restitution as ordered by the court. He remains on conditions of release pending his sentencing hearing, which has yet to be scheduled.

This case was investigated by IRS-Criminal Investigation, the FDIC-OIG and the Albuquerque Office of the FBI, and it was prosecuted by Assistant U.S. Attorney Jonathon M. Gerson.

source: FBI



David Saks



Time&Temp Memphis

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Comment balloon 2 commentsDavid Saks • April 29 2013 01:19PM

Comments

What on earth makes people really think they can pull off this stuff and get away with it?  It is continually in the news where scams are being pulled off, people go to jail, and the next guy thinks he will be able to get away with it.  loil

Posted by Jean Hanley, Specializing in Folks Who Want To Buy/Sell Homes (Coldwell Banker Kivett Teeters) over 6 years ago

It's a criminal mindset, like a compulsive gamblers, of believing that they can get something for nothing, Jean. The prisons are full of real estate swindlers. This is a common, and desperate, crime in the real estate business.

Posted by David Saks ((retired)) over 6 years ago

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