Louis J. Borstelmann, 68, Thousand Oaks, California, has been indicted and charged with mail fraud, wire fraud, and money laundering in connection with a Ponzi scheme that reached Florence, Oregon.
According to the indictment, defendant solicited approximately 100 individuals to invest in real estate through his company Sunburst Associates, Inc., a California corporation, and investors lost more than $18 million. Reportedly, defendant claimed to offer hard-money loans through his company that were secured by real estate deeds of trust. As alleged in the indictment, defendant solicited individuals to invest in the deeds of trust by falsely promising high rates of return and a security interest in the property allegedly pledged to secure the investment.
As further contained in the indictment, defendant, to perpetuate the scheme, sent investors fraudulent investment materials, including the supposed deeds of trust. Based on the indictment, the alleged investments never existed, and defendant used new investor money to pay existing investment obligations. According to the indictment, defendant also spent investor money on personal items, including a car and a home.
“This kind of fraud plays on vulnerable victims-parting people from their money through deception and misrepresentation,” said U.S. Attorney Dwight C. Holton who announced the indictment. Arraignment is set for November 8, 2010, at 1:30 pm before the Honorable Thomas M. Coffin.
An indictment is only an allegation of a crime, and all defendants should be presumed innocent until proven guilty.
This case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service – Criminal Investigation, and the Oregon Division of Finance and Corporate Securities. The case is being prosecuted by Assistant U.S. Attorney Scott E. Bradford.