PONZI SCHEMES, HAWAII, and mortgage fraud

| September 14, 2015 | 3 Comments More

Two Maui residents will have to wait until next month to find out how long they will spend in prison thanks to being found guilty of wire fraud thanks to their involvement in a multi-million-dollar Ponzi scheme associated with their mortgage and insurance business, The Mortgage Store, on Maui. According to court documents, 166 people put in more than $26 million hoping to garner a “guaranteed” seven-percent rate of return. Unfortunately for those investors, the construction of the lenders’ $3.5-million residence and a number of “personal lifestyle trips,” paid-off credit cards, and luxury automobiles guarantee nothing but that your funds are not earning at all[1].

Ultimately, investors were “lucky” in that net losses were only about $9 million in a scheme that the father-daughter duo nicknamed “The Parking Lot.”[2] The two face a maximum of 20 years in prison on each charge of wire fraud and additional fees, fines, and penalties up to twice the value of the funds and financial instruments involved. Neither individual was licensed to accept money for deposits or investments.

Not to be deterred by their pending downfall and sentencing, the defendants optimistically requested that the judge unfreeze a portion of their assets for living expenses while they await their sentencing. At time of publication, that portion of the ruling has not yet been settled. Do you think that they should be able to access their funds since investors did not lose all their money?

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[1] http://www.bizjournals.com/pacific/blog/morning_call/2013/05/maui-owners-of-the-mortgage-store.html

[2] http://mauinow.com/2015/09/09/maui-ponzi-scheme-judgement-pushed-to-october/

About the Author (Author Profile)

Carole Ellis is editor in chief of the Bryan Ellis Investing Letter. Under Carole’s leadership, the Bryan Ellis Investing Letter has grown to over 700,000 subscribers, making it one of the largest real estate newsletters in the world. Each day, Carole directly impacts the daily thinking and conversations of real estate investors worldwide by providing thought-provoking analysis and commentary on news topics relevant to serious real estate investors.

Carole has a strong background in research and in the management of respected publications. She holds a degree in English Literature from the University of Georgia, and has substantial research experience in plant biology. She is the former editor of and writer for the University of Georgia’s Research Magazine. She’s also the author of hundreds of articles and multiple books and home study courses published under the names of her clients, many of whom are well known, highly respected real estate entrepreneurs as well.

Carole makes her home in Kennesaw, Georgia with her husband Bryan and 4 children.

Comments (3)

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  1. Gian says:

    The nerve of these guys. Who do they think they are, a government agency?

  2. G13man says:

    dumb question

  3. sewer lines says:

    Hi, just wanted to mention, I loved this article.

    It was practical. Keep on posting!

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Category: Real Estate