Mauricio R. Munoz, 49, Sandy, Utah, who pleaded guilty to wire fraud and money laundering in connection with a construction fraud scheme involving five lots in the Promontory Point development located near Park City, Utah, will serve 41 months in federal prison. U.S. District Judge Ted Stewart imposed the sentence on January 3, 2013, in federal court in Salt Lake City.
Two other defendants in the case, Daniel Alfonso Blanco, 41, West Jordan, Utah, and Michael Russell Held, 48, Pullman, Washington, were each sentenced to 30 months in federal prison. Each defendant was ordered to pay $2,944,760.46 in restitution in connection with other co-defendants and Blanco and Munoz were ordered to forfeit $2,944,760.46 in currency. Held, who Judge Stewart found to be a minimal participant in the scheme, was not included in the forfeiture judgment. Munoz, Blanco, and Held, who will surrender to begin their prison sentences on February 18, 2013, will be on supervised release for 36 months when they complete their prison sentence.
Justin Hatton, 40, Salt Lake City, who was charged in a separate indictment in connection with the scheme, has pleaded guilty to bank fraud, money laundering, and filing a false tax return. He is scheduled to be sentenced by U.S. District Judge Tena Campbell.
According to documents filed in court, the defendants joined with Hatton in 2007 in falsifying paperwork and making misrepresentations to persuade a father and son living in Park City to lend a substantial portion of their personal savings to place five high-dollar lots ($645,900-$919,000 each) under contract. The defendants misrepresented to the victims that the lots had values of between $1.25 million and more than $1.8 million.
These misrepresentations convinced the victims that they were safe in making bridge loans of $4,414,389 at financial market rates with the understanding that the buyers had paid large down-payments and that the properties, which served as security for the loans, were worth approximately twice what they were lending. Munoz and Hatton asserted that the bridge loans would soon be replaced by a series of construction loans and later, long-term financing. The victims were promised that the construction loans would repay the bridge loans and end their involvement within less than two months.
At the end of the day, court records show, the victims learned that their funds were secured by lots worth less than half the loan. The construction financing that purportedly would pay them off was briefly pursued but not obtained. Hatton, Munoz, and Blanco channeled hundreds of thousands of dollars from the deals. Approximately $600,000 was laundered through the bank account of Munoz‘ mother and divided between Hatton and Munoz. Held, who forged false contracts and documents, appears to have received no more than $300 related to the transactions. A witness reported that Blanco was paid $10,000 for creating essentially double closing documents – one set that reflected the true closing of the loans and diversion of excess loan proceeds to the co-conspirators and another set reflecting a false closing to make the bridge lenders feel comfortable that their loan proceeds had been applied as promised.
The bridge loans were not repaid and the victims suffered substantial losses on each transaction.
The cases were investigated by special agents of the FBI and IRS Criminal Investigation.