David Saks: Seattle Man Guilty of $30 Million Dollar Real Estate Development Fraud

David Saks - Real Estate Broker - The Real Estate Mart of Tennessee, Inc. - 4040 North Watkins-Suite #4 - Memphis, Tennessee 38127 - Phone (901) 357-4663

Seattle Man Guilty of $30 Million Dollar Real Estate Development Fraud

Seattle Man Pleads Guilty to Wire Fraud and Money Laundering for Running Ponzi Scheme Involving Fake Investments in Peru
Investor Preyed on Family, Friends, and Co-Workers to Fund Lavish Lifestyle

U.S. Attorney’s Office July 19, 2013
  • Western District of Washington (206) 553-7970

A Seattle man who marketed real estate investment opportunities in Peru pleaded guilty in U.S. District Court in Seattle today to wire fraud and money laundering for his creation and operation of a classic Ponzi scheme, announced U.S. Attorney Jenny Durkan.

Jose L. Nino de Guzman, Jr., 30, ran NDG Investment Group LLC from 2006 until 2009, when the Washington State Department of Financial Institutions issued a cease and desist order concerning his fraudulent sales of investment opportunities. According to the plea agreement filed in the case, de Guzman raised more than $30 million from over 200 investors for real estate investments in Peru. However, the investments as described to investors did not occur.

De Guzman is scheduled to be sentenced by U.S. District Judge Robert S. Lasnik on November 1, 2013. Pursuant to the terms of the plea agreement, the government will recommend a sentence of 151 months’ imprisonment.

According to records filed in the case, de Guzman left school at the University of Washington without graduating and at the age of 23 founded NDG Investment Group LLC. Prior to starting the company in September 2006, de Guzman had been employed by U.S. Bank as a teller and then as a personal banker.

However, despite his true background, de Guzman solicited investors by telling them he had worked at U.S. Bank for three years as a business and commercial lending officer and specialized in fixed income with a focus on real estate.

“This defendant brazenly and persistently defrauded investors by lying about his background and success and misused millions of their dollars for his personal benefit,” said Jenny A. Durkan, U.S. Attorney for the Western District of Washington. “His victims included family members, friends, and co-workers who did not know he paid for his glitz with their money. When the scheme crumbled, they sadly learned that Mr. de Guzman had perpetuated a massive fraud.”

De Guzman made numerous misrepresentations about his success and the most basic fundamentals of the investments. For example, de Guzman falsely represented to investors that he had a proven track record of successfully developing real estate through an established company in Peru; that the investors’ funds would be used for specific real estate projects and that the investments were secured by real property in Peru; that investors would get a high rate of return on their investments when the development projects were complete; and that NDG would only receive a portion of the profits upon successful completion of the projects and after all the investors had received their original investment and projected rates of return. These representations were false. Neither de Guzman nor NDG had ever successfully completed any real estate projects in Peru and, despite raising funds for approximately 20 projects, had only purchased a limited number of real properties. No projects ever generated a profit. Nevertheless, de Guzman told the investors their projects were completed or were progressing, and he sent periodic, fraudulent “updates” to investors, including showing “construction” sites for projects in which the land had not even been purchased.

Investors’ funds instead were used to fund de Guzman’s lavish lifestyle, including the purchase of a $365,000 diamond ring, a $600,000 yacht, a $250,000 suite at Qwest Field for Seahawks games, and a $200,000 Bentley automobile. Moreover, as in a classic Ponzi scheme, de Guzman used millions of dollars of investors’ funds to pay off previous investors to continue the illusion that de Guzman was a successful developer and to induce additional investors.

“The FBI is pleased that Mr. de Guzman is finally taking responsibility for his actions,” said Special Agent in Charge Laura M. Laughlin of the FBI Seattle Field Office. “He exploited friends, loved ones, and co-workers indiscriminately to fund a lavish lifestyle for himself. The FBI stands with the prosecutors and victims in refusing to tolerate such heartless criminal activity.”

De Guzman pitched his investment opportunity at expensive downtown clubs and hotels and emphasized NDG’s established alliances and relationships with well-known businesses and individuals. Some of the investors were the parents or friends of people employed by NDG, and it was some of these employees who first reported de Guzman to regulators when they became aware of the fraud.

The case was investigated by the Washington State Department of Financial Institutions (DFI), the Internal Revenue Service Criminal Investigations, and the Federal Bureau of Investigation. The case is being prosecuted by Assistant United States Attorneys Tessa Gorman and Justin Arnold, as well as Special Assistant United States Attorney Robert Kondrat, who is a DFI attorney cross-designated to the United States Attorney’s Office to prosecute securities fraud cases.

For additional information please contact Thomas Bates for the United States Attorney’s Office at (206) 553-7970 or Thomas.Bates@usdoj.gov .

source: FBI

David Saks

Time&Temp Memphis

Legal Disclaimer
Please be advised that:

 The information and notices contained in this blog are intended to summarize recent developments and news. The posts are presented as general research and information. These posts are not intended, nor should be regarded, as legal advice. Some blog posts concern allegations made in civil lawsuits and in criminal indictments in United States Courts. All persons are presumed innocent until convicted of a crime and proven guilty. Readers who have particular questions or who believe that they need legal counsel should seek the advice of a qualified attorney. It is neither the editor's or author's intention to create a confidential relationship or any broker-client relationship via communication from this site at any time. Please consult with your state real estate board if questions & answers in the education section conflict with the laws of your region or if you need clarification regarding their applicability or how they may govern the services that you provide.

By entering this web site, you understand the following:
When you select a link to an outside Web site, you are subject to the privacy, copyright, security, and information quality policies of that Web site. David Saks:
1.DOES NOT control or guarantee the accuracy, legality, relevance, timeliness, or completeness of information contained on a linked Web site;
2.DOES NOT endorse linked Web sites, the views they express, or the products/services they offer unless linked web sites, the views they express, or the products/services they offer endorse or support David Saks in accordance with the standards of the Tennessee Real Estate Commission and the Federal Government's laws regarding commerce and the application, solicitation and transmission of internet-related concerns, commerce or social networking;
3.CANNOT authorize the use of copyrighted materials contained in linked Web sites;
4.IS NOT responsible for transmissions users receive from linked Web sites;
5. That DavidSaks.Com is biographical & real estate related. Some links within will leave this site.
6. http://activerain.com/profile/davidsaks is internet-compliant & abides by the rules & regulations of the Tennessee Real Estate Commission, Eve Maxwell, Executive Director.
7. Unless indicated otherwise, ActiveRain does offer listings, or IDX and is provided for licensed salespersons, brokers, buyers & sellers of real property as a community & professional service.
8. David Saks is a retired / licensed real estate broker in the State of Tennessee, license #290452, and an independent contractor.
9. Information is believed to be accurate, but not guaranteed, at any realty link or document connected to the World Wide Web & viewable by anyone connected to the internet who has a web browser.
10. Brokers, buyers, sellers, agents & anyone should independently verify any information prior to submitting any offer to purchase goods & services from any link.
11. Please Visit The American Real Estate Alliance or Memphis.8k.Com for additional information regarding property issues for real estate professionals and consumers.


Photos © & Licensed by Nova Development

All Content Protected © 
Before you even think about
committing a real estate crime
click this red button.
Real Estate Crimes

© All Rights Reserved.





"Information generated by the Department of Justice is in the public domain and may be reproduced, published or otherwise used without the Department’s permission. Citation to the Department of Justice as the source of the information is appreciated, as appropriate."

Department of Justice Legal Policies


  Real Estate Crimes


Click "HERE" For Today's Question



TheListen Now!

David Saks Show

Saturday Nite

9pm-12am Central

University of Memphis



America's Hobby

Click Elvis

Mr.Saks' participation in ActiveRain ended April 13, 2015.

His blog archives will remain online.

May God bless you.

Comment balloon 0 commentsDavid Saks • July 22 2013 02:17PM


This blog does not allow anonymous comments