Jury Convicts “Closer” of Real Estate Investment Fraud Scheme

Allison Tussey —  January 30, 2014 — Leave a comment

Christopher Jackson, 46, Elk Grove, California, after a seven day trial, was found guilty of all six counts charged against him.

Jackson was the last of six defendants who have been convicted for their participation in an investment fraud scheme, Diversified Management Consultants (DMC). According to court documents, between 2003 and 2009, DMC purported to help people invest money in real estate development and save their homes from foreclosure. In reality, DMC was an investment fraud scheme that defrauded at least 180 people out of approximately $36,950,000.

U.S. District Judge Troy L. Nunley commented that the jury’s verdict proved that investors had taken the Jackson’s word as gospel but that he had proved himself a liar. Judge Nunley was not satisfied that Jackson would not simply flee or defraud more people, and ordered Jackson remanded into custody immediately after the jury’s verdict.

Jackson’s accomplices, Michael Bolden, 60; Victor Alvarado, 52; Nicholo Arceo, 40; Erica Arceo, 45; and Garry Bradford, 65, all of Sacramento, California, have all pleaded guilty to charges of conspiracy, wire fraud, and false statements. They await sentencing.

According to the evidence at trial and court documents, DMC was an umbrella for the various defendants’ investment clubs. The defendants induced people to invest their ordinary savings, tax-deferred retirement savings, and proceeds of cash-out residential loan refinancing. They told investors that their money would be used for purchasing property and building structures for a real estate venture. In fact, victim money went to pay other investors’ bogus returns on investment and to pay for the defendant’s personal expenses, including luxury lifestyle expenditures.

Jackson was known as a “closer” among the DMC participants. His investment club, known as Genesis Innovations, recruited approximately 80 investors and took in more than $10 million. Many of Jackson’s victims invested all of their retirement savings with him upon being promised a high interest rate with very little risk. Out of the $10 million, Jackson invested no more than about $2.5 million in developing real estate.

The evidence at trial established that he used the rest to pay false returns to other investors and to live in a way that Jackson himself compared to an entertainment or sports star. Jackson used the Genesis Innovations account to drive a Lamborghini, a Rolls Royce, a BMW, and a Range Rover. He employed a personal chef and a bodyguard who at times carried the metal briefcase that Jackson carried cash in. Jackson took annual trips to Las Vegas where he paid for an entourage of guests to join him at the finest hotels and restaurants. And he spent over $1 million going shopping, buying jewelry, and landscaping his house. All of this money came out of the investment club account.

Michael Bolden pleaded guilty to wire fraud before trial. This was not Bolden’s first federal fraud conviction. In 1994, Bolden was sentenced by U.S. District Court Judge Edward J. Garcia to 21 months in prison for conspiracy, loan fraud, and securities fraud following an earlier federal investment fraud prosecution.

For each count of wire fraud, the maximum statutory penalty is 20 years in prison plus a fine of the greater of $250,000 or twice the gain or loss from the scheme. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The penalties for each count of conspiracy or false statements are five years each per count plus the same fine amount.

Jackson’s sentencing is set for April 10, 2014 at 9:00 a.m. before Judge Nunley.

United States Attorney Benjamin B. Wagner announced the verdict.

This case is the product of an investigation by the Federal Bureau of Investigation. Assistant United States Attorneys Matthew D. Segal and Jared C. Dolan are prosecuting the case.

“Jackson and his co-defendants cruelly took advantage of their victims, extracting from many of them a lifetime of hard-earned savings,” said U.S. Attorney Wagner. “Jackson may have destroyed his victims’ dreams of financial security in retirement, but his own retirement, in a federal prison, will be considerably worse.”

“Devastating financial crimes such as these serve as a reminder to the public that great caution should be taken when presented with an offer of guaranteed high rates of return,” said Special Agent in Charge Monica M. Miller of the Sacramento division of the FBI. “While such crimes are nonviolent, the damage caused to the victims is lasting and often financially crippling. The FBI is committed to combating greed-based crimes and will ensure such brazen violators are held responsible.”

Allison Tussey

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