Woman Sentenced to Prison for Ripping Off Real Estate Investors

Allison Tussey —  February 24, 2015 — 1 Comment

Karen Hanover, 48, Seal Beach, California, was sentenced to 35 months in federal prison for operating a $1.4 million fraud scheme that bilked clients who paid money in response to false promises of ownership in commercial real estate.

The defendant was sentenced by United States District Judge Josephine Staton, who scheduled a May 8, 2015, hearing to determine how much restitution should be paid to approximately 45 victims.

Hanover pleaded guilty last year to one count of mail fraud related to the scheme she ran out of two Long Beach companies – Commercial Investment Education LLC and Kharmic Life Strategies Inc. Hanover pitched her “Fast Track” investment program to investors who attended seminars in Southern California, Dallas and Las Vegas, Nevada.

Victims were induced to invest between $19,000 and $29,000 in the real estate scam. In her pitches, Hanover “falsely represented to the ‘Fast Trackers’ that she would partner with them in real estate deals, they would receive 100 percent returns on their investments, and she would provide a 100 percent refund if they did not obtain a commercial property within a year,” according to court documents that noted these promises were false.

In sentencing papers filed with the court, prosecutors described how some victims invested borrowed money or all of their savings based on Hanover’s purported “guarantees.” When victims demanded the return of their money, Hanover engaged in “bullying and intimidation” – tactics that Judge Staton noted during today’s hearing when she said Hanover caused substantial harm, which was aggravated by threatening victims with jail time if they reported her.

Previously in this investigation, Hanover was found guilty at trial in October 2011 of impersonating an FBI agent for contacting the victims of her fraud scheme, using a telephone number designed to appear to be associated with the FBI and threatening them with arrest if they told others about her fraudulent conduct. As a result of this separate case, Hanover was sentenced to six months in prison and ordered to pay a $5,000 fine.

This investigation was conducted by the FBI.

Allison Tussey

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One response to Woman Sentenced to Prison for Ripping Off Real Estate Investors

  1. It’s insane that people can get away with this kind of thing nowadays… you’d think we’d have adapted new ways to catch them.

    Someone I know got away with this kind of thing for about 5 years straight, they had an accountant, a lawyer, and a real estate agent all on the payroll to get away with it. Got taken down just like this lady.

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