January 18, 2022

Maryland Heights Residents

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San Diego Real Estate Agent Sentenced for Multi-Million-Dollar Ponzi Schemes | USAO-SDCA

5 min read

Assistant U. S. Lawyers Oleksandra Johnson (619) 546-9769 and Valerie H. Chu (619) 546-6750

Information Launch SUMMARY – January 3, 2022

SAN DIEGO – Alexander Avergoon, a longtime San Diego genuine estate agent and businessman, was sentenced in federal court docket right now to 64 months in jail for defrauding investors in a number of Ponzi real estate investment strategies.  As element of his guilty plea, Avergoon also admitted to collaborating in many tax evasion and fraud strategies with Rabbi Yisroel Goldstein, previous director at Chabad of Poway.

Avergoon was requested to shell out $9,679,306.70 in restitution to many victims. The Courtroom also purchased Avergoon to forfeit to the United States the amount of money of $5,205,234.41 as proceeds of unlawful conduct and property concerned in the offense. 

“This defendant is a prolific fraudster who has stolen millions of pounds from the many victims of his devious schemes,” explained U.S. Lawyer Randy Grossman. “It’s now his turn to pay the rate for his crimes.” Grossman thanked the prosecution group, the FBI and the IRS for their perseverance to acquiring justice in this matter.

“The defendant participated in intricate monetary schemes which defrauded private citizens out of thousands and thousands of dollars,” mentioned FBI Unique Agent in Cost Suzanne Turner. “The FBI will proceed to work with our legislation enforcement companions to root out all types of money fraud which not only harm the victims, but also negatively impact those who count on individual donors and buyers to perform legitimate small business.”

“Mr. Avergoon victimized dozens of investors twofold, by not only swindling them out of millions of pounds, but also recruiting victim-buyers to dedicate tax fraud,” claimed Special Agent in Charge Ryan L. Korner of IRS Felony Investigation’s Los Angeles Discipline Place of work.  “Today’s sentencing sends a clear concept that IRS Legal Investigation will go after and keep accountable monetary fraudsters who deceive and cheat individuals in search of to invest in our serious estate and lending markets. Our Special Agents have been happy to get the job done with the FBI and the U.S. Attorney’s Office to bring Mr. Avergoon’s strategies to an end.”

Avergoon pleaded guilty in July 2020, admitting that from 2010 to 2015, he and Goldstein recruited at the very least 9 taxpayers who designed additional than $275,000 in fraudulent “donations” to the Chabad. Avergoon acted as a conduit to secretly return 90 percent of the funds to the purported “donors.”  Avergoon also admitted that he joined Rabbi Goldstein in a grant fraud fraud in which they acquired hundreds of 1000’s of bucks in misappropriated grant funds, and a government benefits fraud plan.

As component of the government rewards fraud scheme, Avergoon employed shell companies, which includes “Imagination Design Business,” to create fictitious and backdated invoices for solutions like carpet installation, repairs to the Chabad of Poway’s HVAC process, and replacing damaged books and other supplies—even while Avergoon experienced never ever done these products and services.  In some circumstances, Avergoon would give Goldstein a number of faux bids from various shell providers, so that Rabbi Goldstein could trick the grant method administrators into believing he experienced complied with their competitive bidding demands.  Avergoon and Goldstein pretended that the federal government grant cash would be utilized for services updates, security systems, and local community packages.  But in fact, the cash usually went straight to Goldstein’s and Avergoon’s pockets other situations they used portions of it to pay back contractors who had in fact charged a great deal decreased price ranges than mirrored on Avergoon’s phony paperwork.

Apart from his fraudulent partnership with Rabbi Goldstein, Avergoon also admitted to collaborating in different real estate Ponzi schemes from 2010 to 2016, in which he cheated retirement buyers out of a total of $12 million. Avergoon was a San Diego-based mostly actual estate agent, and he made use of his industry knowledge and status to focus on trusting victims who would devote in what they assumed was the buy of rental assets. 

Avergoon promised every month dividends that would be paid out from rental money.  He created written investment resources like prospectus and projected money and bills calculations, made to give investors the false perception that their funds would be safely and securely tucked away in passive-cash flow retirement investments.  But in truth of the matter, instead of working with investors’ funds to acquire rental properties as he promised, Avergoon put in the money himself and just pretended that he had purchased the condominium buildings and business area he marketed.  In accurate Ponzi vogue, for a time, Avergoon manufactured the promised dividend payments—but somewhat than employing lease income, he funded these payments utilizing new trader money.

Avergoon deceived extra than a dozen unwitting traders, convincing them to element with at the very least $5 million.  When an trader would inquire to cash out, he inspired them to re-make investments, and at a single place he pretended to “roll over” their retirement investments to obtain a multi-million-greenback business constructing. In fact, he purchased that constructing with a bank loan, not with trader cash, and yet again diverted their revenue to his have particular use.  He created fake partnership agreements, bogus obtain documents and deeds, and other fictitious documents, and forged the signatures of his traders to conceal the fraud—then laundered the proceeds in get to disguise the correct source and ownership of the revenue.

Avergoon did not stop there.  He persuaded traders to portion with a different $5 million or a lot more by pretending to use their money to fund short-phrase, minimal-danger financial loans supposedly secured by the borrowers’ substantial-close San Diego residences.  But in fact, there ended up no “borrowers”—Avergoon used his real estate connections to detect homes he could pose as collateral, and he basically doctored up faux financial loan agreements and forged the borrowers’ signatures.  In some cases, the people he claimed had been the debtors did not even personal the homes that had been purportedly employed as collateral.  Avergoon built phony personal loan agreements, Deeds of Belief, property finance loan Notes, and other official-wanting documents, and he even developed bogus notary stamps and San Diego County Recorder’s Office environment markings to make the paperwork look authentic.  The moment all over again, Avergoon utilised new trader income to make occasional payments to his victims, to make it look that the “loans” have been undertaking.  But in truth, he diverted the income to his own use and the “investments” have been worthless.

Avergoon was indicted in August 2019 and apprehended in Latvia.  He was extradited to the United States in November 2019 and has remained in custody given that his extradition and preliminary visual appeal in federal courtroom in San Diego.

DEFENDANT                                                                       Situation Amount 19cr2955-BAS                   

Alexander Avergoon       Age: 46           San Diego                  

Prices

Wire Fraud, in violation of Title 18, USC 1343
Greatest Penalty: 20 decades in prison

Aggravated Id Theft, in violation of Title 18, USC 1028A
Greatest Penalty: Two a long time minimal consecutive time period in prison

Dollars Laundering, in violation of Title 18, USC 1956(a)(1)(B)(i)
Most Penalty: 20 a long time in prison

INVESTIGATING Organizations  

Federal Bureau of Investigation

Inner Profits Company – Felony Investigations

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