Why Bill Gulley harps about financing!

11 Replies

Here is an example of how things go wrong even if the "investor" had good intentions!

Ex-financial advisor from Springfield goes to prison for Ponzi scheme

By edited news release from U.S. Attorney's Office for Western Missouri |

Posted: Thu 4:43 PM, Oct 20, 2016

SPRINGFIELD, Mo. - A man from Springfield received a federal prison sentence of two years and nine months on Thursday for an investment fraud scheme that gained him more than $1.1 million. A judge also ordered Christopher Hanson, 54, to pay $1,134,500 in restitution to his victims.

Hanson pleaded guilty on Sept. 14, 2015, for wire fraud and money laundering. The owner of Hanson Holdings admitted he was responsible for losses that totaled $1,134,500 for three victims of his Ponzi scheme.

Hanson offered the three victims what he described as “an investment opportunity.” Hanson told two of the investors that he would take their investment monies and purchase a collateralized mortgage obligation (CMO). Hanson claimed a line of credit would be obtained against the CMO and both investors would receive their original investment plus a substantial dividend within months.

Hanson told the third victim that he would purchase bonds and securities with his $100,000 investment. Hanson claimed this investment would generate a 250 percent return and the investor would receive double his original investment within 40 weeks.

Financial records revealed none of the monies obtained by Hanson or Hanson Holdings from these three investors were used to purchase securities or a CMO as Hanson promised. Agents determined Hanson authorized the release of the investors’ monies from his Scottrade Account, ETrade Account, or StockCross Account, into his personal bank accounts.

Hanson used the money for personal expenses, to pay off parties unrelated to the investment, or he would use the money to pay off earlier investors who were clamoring for a return of their money.

According to court documents, Hanson also engaged in an unrelated ongoing fraud in Apple Valley, Minn., for which he faces a civil suit. Hanson also faces state charges in Greene County Circuit Court for a similar, but unrelated, fraud scheme.

The FBI and IRS investigated this case.

Now, I knew this guy !  Folks need to think before they get other people's money tied up and promise or even imply they have a great deal!

I think he went down a slippery slope!  Are you?  

:)

This story was reported by KY3 in Springfield, Mo.

Am I confused as to the definition of Ponzi scheme?  Isn't this just general fraud?

Bill... this guy simply diverted investor money it sounds like.. as he bought or invested in neither scheme that he told investors.. can't help it there are crooks out there.. plane and simple.

however the investor should have realized that 250% returns were highly suspect

If it sounds too go to be true, it probably is...

The slippery slope.......

Get investors for your deals, or to loan out or buy notes, whatever.

The deals are harder to come by, money is sitting there you're paying or accruing interest on.

Then you investor money matures or someone screams they want their money back, but you don't have it.

Then a new investor comes in for your XYZ deal. You don'y have the deal done yet but you "borrowed" it. So, you shift money in your operating accounts.

Payoff the little old lady who is calling her attorney.

Now the XYZ is about ready but you're short.

Hey, you'll get all the money later, you have to pay your house payment and eat, continue operations with your investor parties or you'll die on the vine.

Well, XYZ falls through, time to pay all the pipers.

Wooops, and you say you're from the FBI, what is this all about?

It's about promises and implications you make.

It's about escrowed funds and separate accounts.

It's about having the collateral when you take the money.

It's about eating off other peoples money.

It's about wiring funds and using the mail at any time to find your investors.

It's about one unhappy investor and a phone call!

Then it's about wearing an orange jump suit!  :)

Bill totally agree with your premise.. and for that reason when I ran my HML shops I would ONLY use bank LOC's were I paid interest ONLY when I back filled the funds... I saw Many HML companies that raised funds through PPM's go out of bizzness in flames.. they had raised all this dough and had to start paying interest on it form inception of the investments...

this led them to negative cash flow almost immediately and they would get desperate to make deals since they were paying on the 10 mil they raised on the PPM.. its a fine line that one..  

Gained a million bucks and only has to spend 2 yrs in Club Fed ... not bad.  Most folks have to slave their whole life in a crappy job and don't gain anything close to a million.  He has to pay it back but of course never will.

I don't really agree David, funds in accounts are seized, assets frozen, property auctioned off. Then if any liability remains, future income and assets are always at risk.

Granted, the big crooks that play bankruptcy games might keep more, but not so much from convictions ordered by a federal or state court. The IRS will assist the courts, it's much harder with civil claims finding assets and sources of income.

 A Ponzi scheme is when funds are used by investors to pay obligations of other investors, the money just circulates while the "manager" sips off the profits or the top of the accounts. Yes, it is financial fraud, but unique as the scam goes. :)

Being a Springfield native this guys name sounds really familiar...I suppose I'm fortunate not to have known him =)

Can't the funds be held in a separate escrow account until an investor approved purchase is made, to prevent co-mingling of funds?

Originally posted by @Berny Petersen :

Can't the funds be held in a separate escrow account until an investor approved purchase is made, to prevent co-mingling of funds?

 Yes, but even better is for the money to go from the investor to the settlement agent, there is no good reason to give the money to a "manager". :)

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