U.S. District Judge Jane Triche Milazzo sentenced Timothy Monahan, a San Diego Real estate investor, to one year and one day jail time after pleading guilty to wire fraud involving the St. Tammany Parish deal, The Times-Picayune New Orleans reports, citing the U.S. Attorney's office.
Aside from that, Monahan will be supervised for two years after completing his sentence. He also paid $140,525.19 restitution to the Bolivar Investment Group, LLC which was the corporation that was the victim in the deal, the outlet adds.
The Times-Picayune New Orleans explains that Monahan, along with his business partner, Marc Hoffman, sought around $3M investments to purchase a 5-acre land near the Lakeview Regional Medical Center north of Mandeville to develop two office buildings. Capital for the project would be coming from Bolivar Investor Group, L.L.C. (Bolivar) which is an investment group formed by Crescent River Port Pilots Association.
In 2009, to continue with the project, The Times-Picayune notes that Monahan, Hoffman and Bolivar, formed a new corporation called ANewtrac West. However, Bolivar representatives could not access cash---even the $3 million the company put in from January to July 2009. It was because only Monahan and Hoffman were the authorized parties to handle the finances after setting up a bank account with Newtrac West as the account name.
Through the Newtrac West Account, Monahan reportedly used around $140,525.19 for unauthorized transactions and financial reasons that were not officially intended to the St. Tammany project.
Monahan and Hoffman also lied to Bolivar by falsifying financial statements for Newtrac West. Bolivar believed that Newtrac West is in good financial position.
While Monahan only got a year and one day, in August 2013, the Eastern District of Louisiana sentenced sentenced Hoffman to serve 24 months in prison because of his involvement in the scheme. Hoffman misused more than $404,000 from Bolivar's funds according to another report published on The Times-Picayune.
"The guy ripped us off, out of all the money in the project," Emerson Loga, managing partner at Bolivar, told The Times-Picayune.
For the general public, this also reminds us to be vigilant and always scrutinize the background of the developers behind real estate projects we want to invest in.
Here's a very important tip written by Morgan Brennan for Forbes:
"Do your homework. Take the extra steps to ensure a workshop's credibility or a property listing's authenticity, be it cross-checking different listing sites and verifying a broker or company's licenses. It's amazing what a simple Google search can yield. Review government websites for recommendations, tips or to search for complaints. "
