Robert E. Rosenau, 46, Redding, California, was sentenced by U.S. District Judge William B. Shubb to 15 months in prison for mail fraud in a fraudulent real estate investment scheme. Rosenau was also ordered to pay restitution to the victims identified in his plea agreement.
According to the plea agreement, Rosenau was employed with Rosenau Investments Inc. (RII), a real estate investment company founded and run for years by his parents. RII was a hard-money lender, specializing in short-term loans for real estate rehabilitation in anticipation of sales of the rehabilitated properties. RII obtained the money for loans from individual investors tied to specific properties. Investors were paid from monthly payments by borrowers or when a property was sold. RII told its investors that it did not loan money on properties with a loan to value ratio of over 70 percent and that it maintained a lien on the properties in a primary position.
As previously reported by Mortgage Fraud Blog, and according to court documents, in or around January 2008, Rosenau told investors that RII was doing well and not having problems collecting money from its borrowers, in spite of the fact that most properties were in arrears and many had been foreclosed upon, in an effort to obtain new investment funds. The funds were not used for new investments, but were paid to other investors and used by Rosenau.
This case was the product of an investigation by the Federal Bureau of Investigation and the Redding Police Department. Assistant United States Attorney Jean M. Hobler and Special Assistant United States Attorney Nicholas Fogg prosecuted the case.