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Developer Charged in $2M Scheme

Wednesday, August 5, 2015

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A real-estate developer faces 20 years in prison and hefty fines after allegedly bilking investors in a $2 million Ponzi scheme, according to authorities.

Richard L. Thompson, 60, of Sarasota, FL, is charged with one count of wire fraud in a criminal information filed July 21 in U.S. District Court in Chicago.  

Authorities say Thompson induced investors to purchase shares in his real estate development company, Latten Management LLC, and to personally loan him money, on the false premise that his company owned more than 200 acres of property in Tennessee, U.S. Attorney for the Northern District of Illinois Zachary T. Fardon announced July 22.

Courthouse
http://www.ilnd.uscourts.gov

Richard L. Thompson, 60, of Sarasota, FL, is charged with one count of wire fraud in a criminal information filed July 21 in U.S. District Court in Chicago.

Thompson took in approximately $2.1 million in the scheme and used the money for personal use, according to the prosecutors.

The charge carries a maximum sentence of 20 years in prison, and a maximum fine of $250,000 or twice the gross gain or gross loss resulting from the offense, whichever is greater.

Thompson will make an initial appearance before U.S. Magistrate Judge Maria Valdez on a date to be determined by the Court, the U.S. Attorney’s Office said.

Properties at Issue

According to the criminal information, Thompson founded Latten Management in 2007 to develop vacation properties in Tennessee. He personally purchased 54 acres of land in the Green Mountain area and 15 acres in the Green Ridge Park area.

There were mortgages on both properties, and Thompson kept title in his name without ever transferring them to Latten Management, the information alleges.

Ponzi
Public Domain

"Borrowing Peter to pay Paul" is a scheme made famous by Charles Ponzi, an Italian immigrant who swindled investors in Boston in the 1920s.

Later, Thompson and other individuals purchased 217 acres in the Catawba Peak area, but they defaulted on the loan for the property in February 2009, leaving a debt of $9.8 million.

Latten Management did not own the Catawba Peak property either, the prosecutors say.

Soliciting Funds

The complaint alleges that from early 2009 until April 2011, Thompson offered and sold shares in his company by telling prospective investors that Latten Management owned the three properties in Tennessee, and that the company would develop them into vacation destinations.

He reportedly gave tours of Green Mountain, Green Ridge Park and Catawba Peak areas to potential investors. Moreover, the complaint alleges that Thompson concealed the fact that he had defaulted on one of the property loans.

Fardon
Official Photo

U.S. Attorney for the Northern District of Illinois Zachary T. Fardon announced the charges.

Authorities say Thompson used the money he was able to solicit for personal use, including his home mortgage, his family’s credit cards, electric bills, college tuition, life insurance, and a Lexus, the information states.

Concealing, Filing False Documents

In order to conceal his scheme, Thompson had to continually obtain new funds in order to satisfy his existing obligations to repay investors through Ponzi-type payments, according to the prosecutors.

He also publicly filed false documents with the U.S. Securities and Exchange Commission, and intentionally misled investors about the status of their investments and loans, the information charges.

The case was investigated by the Federal Bureau of Investigation.

   

Tagged categories: Business operations; Criminal acts; Developers; Ethics; Finance

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