Real Estate Developer Sentenced for Orchestrating $50 Million Securities Fraud Scheme
SAN DIEGO. CA—Commercial real estate developer and mortgage broker Bradley Holcom was sentenced to 10 years in prison today for his role in a $50 million securities fraud scheme.
Holcom, 57, pleaded guilty in July before U.S. District Judge Cathy Ann Bencivengo to committing wire fraud in connection with the sale of approximately $50 million worth of promissory notes which he sold to more than 150 investors located throughout the United States.
At the sentencing hearing today, elderly investors who had lost millions of dollars asked the judge to impose the maximum sentence. The investors – some tearful, some angry, all financially and emotionally debilitated – told the court of the devastating impact of losing their life’s savings at retirement age with no ability to recover.
“My retirement funds for my golden years are gone,” one of the victims said during the hearing. “He could’ve pointed a gun to my head or held a knife to my chest, and he couldn’t have hurt me more.”
According to court documents, Holcom solicited investors to provide funds for the development of raw land for commercial and residential purposes through an investment program he operated called the Trust Deed Investment Program. Holcom admitted that he falsely told investors who purchased notes through the Trust Deed Investment Program that they would receive a lien on a specific piece of property he was developing and that the lien would be in first position.
However, as Holcom further admitted, he never provided investors with a lien in the property he was purportedly developing and instead conveyed to investors a lesser interest that did not allow them to directly foreclose on the property to protect their investment. In addition, Holcom admitted that while he promised investors that their purported lien would be in first position, he subsequently solicited investments for properties that he knew were already encumbered by first position liens.
According to court documents, Holcom also sold properties that were supposedly serving as the security for investors without informing them that the property they had financed for development was gone. Holcom admitted that in 2008 and 2009, even though his financial condition had seriously deteriorated, he continued to solicit investors for new funds by making misrepresentations about his true financial condition and the manner in which he was using investor money. As a result of the scheme, Holcom admitted that his conduct caused approximately $50 million in losses.
Holcom was also sentenced to three years of supervised release and ordered to pay restitution to his victims, with the final amount of restitution to be determined at a hearing on January 9, 2015. Holcom was ordered to begin serving his sentence on January 12, 2015.
This case was investigated by the FBI’s Phoenix Division – Yuma Resident Agency. The case is being prosecuted by Trial Attorney Henry P. Van Dyck and Deputy Chief Daniel Braun of the Criminal Division’s Fraud Section, and by Assistant United States Attorney Mark Pletcher of the United States Attorney’s Office for the Southern District of California. The Department recognizes the substantial assistance of the U.S. Securities and Exchange Commission.
|DEFENDANT||Case Number: 13-cr-1723|
|Bradley Holcom||Age: 57||Canby, Oregon|
- Wire fraud, in violation of 18 U.S.C. § 1343.
- Maximum Penalties: 20 years in prison, $250,000 fine or twice the gain or loss from the offense.
- Federal Bureau of Investigation