f
Guilty Plea in $1.4 Million Ponzi Scheme
0
Votes

Guilty Plea in $1.4 Million Ponzi Scheme

An Alexandria man pleaded guilty Dec. 4 to running a Ponzi scheme that defrauded over 20 victims of more than $1.4 million.

According to court documents, Brian Thomas Sapp, 38, ran a company called Novus Properties, which purported to have relationships with banks and mortgage lenders who wished to sell distressed lender-owned properties. These were supposedly single-family residences in Virginia, Maryland and the District of Columbia. Sapp raised capital from investors to loan him money to be used in the purchase of the homes, which he claimed he would resell 90 days later at a substantial profit. Sapp promised rates of return as high as 25 percent, and falsely claimed to have a guaranteed buyer for all his properties, usually a real Alexandria-based construction company.

To execute the scheme, Sapp stole the identity of the president of the construction company. Sapp, using a cloud-based platform called DocuSign, executed false contracts between Novus and the construction company, using the same IP address within minutes of each other to affix both his own digital signature as seller for Novus and the digital signature of the victim construction company president as buyer. Sapp would send the purchase contracts to victims, along with falsified HUD-1 Settlement Statement summaries, as evidence that he had purchased the properties and already contracted to re-sell them. Altogether, Sapp executed hundreds of false real estate transactions to induce victims to part with money. Sapp did not close on deals and used victim money to buy a Mercedes, take golf vacations, and to make lulling payments to investors. Sapp targeted close friends and their family who trusted him.

Sapp pleaded guilty to wire fraud and to aggravated identity theft and faces a mandatory minimum penalty of two years in prison for the identity theft charge, and a maximum of 20 years for the wire fraud charge, when sentenced on March 15. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.