San Diego Real Estate Developer Sentenced for Wire Fraud
U.S. Attorney Kenneth A. Polite announced that TIMOTHY MONAHAN, age 36, a real estate developer from San Diego, California, was sentenced today after previously pleading guilty to committing wire fraud.
U.S. District Judge Jane Triche Milazzo sentenced MONAHAN to one year and one day incarceration, followed by two years of supervised release. Restitution to the Bolivar Investment Group, LLC in the amount of $140,525.19 was paid prior to sentencing.
According to court documents, in about late 2008, MONAHAN and his business partner, “M.H.,” sought investors to invest approximately $3,000,000 for the acquisition of an approximately five-acre tract of land adjacent to the Lakeview Regional Medical Center in Covington, Louisiana, and the development of two office buildings on that land. MONAHAN and M.H. convinced Bolivar Investors Group, L.L.C., an investment group organized by members of the Crescent River Port Pilots= Association, to invest the money. In February 2009, MONAHAN, his partner, and Bolivar created a new entity, ANewtrac West,@ to facilitate the purchase and development. As part of the agreement, Bolivar agreed to fund a $3,000,000 capital contribution to Newtrac West. Shortly thereafter, MONAHAN and his business partner opened a bank account in the name of Newtrac West; while representatives of Bolivar were supposed to have access to the account, in truth only MONAHAN and M.H. had access. Between January 20, 2009, and July 14, 2009, Bolivar made six deposits, including five by wire, into the Newtrac West bank account, totaling approximately $3,000,000.
Between January 20, 2009, and July 27 2009, MONAHAN used approximately $140,525.19 from the account without authorization to pay expenses and debts apart from and unrelated to the purchase or development of the land in Covington.
Subsequently, MONAHAN and M.H. devised a scheme to hide the misuse of funds. Specifically, false financial and bank statements of Newtrac West, based on the real bank statements for the Newtrac West account, were created to hide the unauthorized withdrawal of funds and to deceive representatives of Bolivar into believing that Newtrac West was in excellent financial condition. For example, while the Newtrac West account had a true balance of negative $29,292.45 on September 30, 2009, the doctored statement represented that the account had a balance of $826,512.92.
MONAHAN’S partner, M.H., was charged in the Eastern District of Louisiana in August 2013 for his role in the above-described scheme. He pleaded guilty in the Southern District of California and was sentenced to twenty-four months in jail earlier this year.
U.S. Attorney Polite praised the work of the Federal Bureau of Investigation in investigating this matter. Assistant United States Attorney Jordan Ginsberg was in charge of the prosecution.