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

Assistant US Attorneys Oleksandra Johnson (619) 546-9769 and Valerie H. Chu (619) 546-6750

SUMMARY OF THE PRESS RELEASE – January 3, 2022

SAN DIEGO – Alexander Avergoon, a longtime real estate agent and businessman from San Diego, was today sentenced in federal court to 64 months in prison for defrauding investors into several Ponzi schemes. As part of his guilty plea, Avergoon also admitted to participating in multiple tax evasion and fraud schemes with Rabbi Yisroel Goldstein, former director of Chabad of Poway.

Avergoon was ordered to pay $ 9,679,306.70 in restitution to several victims. The court also ordered Avergoon to confiscate from the United States the sum of $ 5,205,234.41 as proceeds of illegal conduct and property involved in the offense.

“This defendant is a prolific fraudster who stole millions of dollars from the many victims of his devious schemes,” said US Attorney Randy Grossman. “Now is his turn to pay the price for his crimes.” Grossman thanked the prosecution team, the FBI and the IRS for their dedication to securing justice in this case.

“The accused participated in complex financial schemes which defrauded private citizens of millions of dollars,” said FBI Special Agent Suzanne Turner. “The FBI will continue to work with our law enforcement partners to eliminate all forms of financial fraud that not only harm victims, but also negatively impact those who rely on individual donors and investors to carry out. legitimate business. “

“Sir. Avergoon has doubly victimized dozens of investors, not only by defrauding them millions of dollars, but also by recruiting investor-victims to commit tax evasion,” said Special Agent in Charge Ryan L. Korner from the Los Angeles field office of the IRS Criminal Investigation. “Today’s conviction sends a clear message that the IRS criminal investigation will prosecute and hold accountable financial fraudsters who deceive and deceive seekers. to invest in our real estate and credit markets Our Special Agents were proud to work with the FBI and the US Attorney’s Office to put an end to Mr. Avergoon’s schemes.

Avergoon pleaded guilty in July 2020, admitting that from 2010 to 2015, he and Goldstein recruited at least nine taxpayers who made more than $ 275,000 in fraudulent “donations” to the Chabad. Avergoon served as an intermediary to secretly return 90% of the money to the so-called “donors”. Avergoon also admitted that he joined Rabbi Goldstein in a fraudulent grant scam in which they obtained hundreds of thousands of dollars in embezzled grant funds and a government benefit fraud program.

As part of the government benefit fraud program, Avergoon used shell companies, including “Imagination Construction Company”, to create fictitious and backdated invoices for services such as carpet installation, HVAC system repairs. of Chabad of Poway and the replacement of damaged books and other supplies. even though Avergoon had never rendered these services. In some cases, Avergoon would give Goldstein several bogus offers from different shell companies, so that Rabbi Goldstein could trick the grant program administrators into believing he had complied with their bidding requirements. Avergoon and Goldstein claimed that government grant funds would be used for facility upgrades, security systems, and community programs. But in reality, the money often went straight into the pockets of Goldstein and Avergoon; at other times, they used some of it to pay contractors who had in fact charged prices much lower than those reflected on the forged Avergoon papers.

Aside from his fraudulent partnership with Rabbi Goldstein, Avergoon also admitted to participating in separate Ponzi schemes from 2010 to 2016, in which he deceived retirement investors totaling $ 12 million. Avergoon was a San Diego-based real estate agent, and he used his industry knowledge and reputation to target trusted victims who would invest in what they thought was buying rental property.

Avergoon promised monthly dividends that would be paid from rental income. He created written investment documents such as prospectuses and projected income and expense calculations designed to give investors the false impression that their money would be safely stashed in passive income retirement investments. But in truth, instead of using investor money to buy rental properties as he had promised, Avergoon spent the money himself and just claimed to have bought the apartment buildings and offices that he had promised. ‘he had announced. Much like Ponzi, for a time Avergoon made the promised dividend payments, but rather than using the rent income, he funded those payments using new investor money.

Avergoon has deceived more than a dozen unwitting investors, convincing them to part with at least $ 5 million. When an investor asked for a withdrawal, he encouraged them to reinvest, and at one point pretended to “roll over” his retirement investments to buy a multi-million dollar commercial building. In fact, he bought this building with a loan, not with investors’ money, and once again embezzled their money for his personal use. He created fake partnership agreements, fake purchase documents and deeds and other fictitious documents, and forged the signatures of his investors to cover up the fraud, then laundered the proceeds in order to conceal the true source and the ownership of money.

Avergoon didn’t stop there. He convinced investors to part with an additional $ 5 million or more by pretending to use their money to fund short-term, low-risk loans purportedly secured by borrowers’ high-end homes in San Diego. But in reality there were no “borrowers” ​​- Avergoon used his real estate connections to identify houses he could put up as collateral, and he simply forged fake loan agreements and forged borrowers’ signatures. . In some cases, the people he claimed to be the borrowers did not even own the homes that would have been used as collateral. Avergoon made fake loan agreements, trust deeds, mortgage notes, and other official-looking documents, and he even created fake notary stamps and San Diego County Recorder’s Office marks for that the documents appear legitimate. Once again, Avergoon used new investor money to make occasional payments to its victims, to make the “loans” appear to be performing well. But in truth, he embezzled the money for his own use and the “investments” were of no value.

Avergoon was charged in August 2019 and apprehended in Latvia. He was extradited to the United States in November 2019 and has remained in detention since his extradition and initial appearance in federal court in San Diego.

RESPONDENT File number 19cr2955-BAS

Alexander Avergoon Age: 46 San Diego

CHARGES

Electronic fraud, in violation of Title 18, USC 1343
Maximum penalty: twenty years in prison

Aggravated identity theft, in violation of Title 18, USC 1028A
Maximum penalty: minimum two consecutive years in prison

Money laundering, in violation of Title 18, USC 1956 (a) (1) (B) (i)
Maximum penalty: twenty years in prison

INVESTIGATION AGENCIES

Federal Bureau of Investigation

Tax Service – Criminal Investigations

Source link