Prison Sentence for $20 Million Real Estate Fraud
Attorney General Edmund Brown announced that Thomas Hastert plead guilty to 59 felony counts of securities fraud, embezzlement and selling securities that were unregistered.
Brown alleged Hastert was involved in an elaborate real estate scam, stealing millions from investors. For his plea, Hastert will spend 5 years in federal prison. Not bad for a $20 million dollar fraud.
Hastert brokered over 270 hard money loans in Central and Northern California for real estate projects. Hard money loans are secured with collateral and usually have higher returns for the private investors who supply the money.
Hastert is accused of:
-Misleading investors by telling them that the borrowers had high credit scores and were financially able to repay the loans.
-Failing to place funds into an escrow account monitored by a third-party escrow company.
-Telling investors he would personally oversee development projects, which he did not.
-Setting up straw men investors to keep the actual investors off track.
-Embezzling fees on loans he brokered.