Patrick Brody Pleads Guilty to Wire Fraud, Money Laundering in Connection with Real Estatement Investment Scheme
Plea Includes 41-Month Sentencing Recommendation; $1,331,075.36 in Restitution to Victims

SALT LAKE CITY—Patrick Merrill Brody, age 47, of Salt Lake City, pleaded guilty to wire fraud and money laundering Wednesday in U.S. District Court in Salt Lake City in connection with a real estate investment fraud scheme.

The plea agreement includes a sentencing recommendation of 41 months and restitution of $1,331,075.36. Sentencing is scheduled for July 25, 2013, before U.S. District Judge Robert J. Shelby. Brody, who has been in custody since his arrest in October, will be released from custody pending sentencing with a variety of special conditions in place as a part of his supervised release.

Brody was charged with conspiracy, mail and wire fraud, and money laundering in a nine-count indictment returned by a federal grand jury in October 2012. The indictment alleged Brody and his wife, Laura Ann Roser, operated Art Intellect Inc., a Utah corporation doing business as Mason Hill. The business had offices in Salt Lake City and Cape Coral, Florida. Mason Hill solicited and sold investments in real estate properties. It offered potential clients an option for investing in rental residential properties in several states. Mason Hill offered to sell investors rental properties at a low price, repair and rehabilitate them if necessary, find renters for the properties, collect rent, and maintain and manage the properties for the benefit of the investors.

The indictment alleged that, once received, investors’ funds were comingled with other investors’ money, used to purchase properties for earlier investors, and used to pay operating expenses of Mason Hill as well as personal expenses for the defendants—among other things. In some instances, investors’ money was used to make Ponzi payments to earlier investors.

As a part of Wednesday plea agreement, Brody admitted that from April 2009 through early 2011, he made important business decisions for the company, hired and instructed employees, and directed the use of company proceeds.

Brody admitted that ultimately, the company became a scheme that obtained money or property through fraudulent representations or promises. The fraudulent representations were made with the intent to induce clients to make investment payments to Mason Hill. Funds invested through the scheme were converted to personal use by Brody, which deprived the company of the capital necessary to complete real estate transactions as promised. Many of the clients who invested in the scheme did not receive any property or any other thing of value in return for their investment payments and did not receive refunds of their payments.

As a part of the plea agreement executed Wednesday, federal prosecutors agreed to offer Roser a plea agreement that includes one misdemeanor count of failure to file a quarterly tax return. Federal prosecutors also agreed that they will not seek restitution from Roser on the charges in the indictment.

The case is being prosecuted by the U.S. Attorney’s Office and investigated by special agents of the FBI and IRS-Criminal Investigation.