Longtime San Diego realtor Alexander Avergoon was sentenced to decades in prison this week following a conviction in a multi-million dollar Ponzi schemes.
A statement issued by the Justice Department informed that Avergoon was sentenced to 64 months in prison and and ordered to pay $9,679,306.70 in restitution. The Court also ordered Avergoon to forfeit $5,205,234.41 as proceeds of illegal conduct.
“This defendant is a prolific fraudster who has stolen millions of dollars from the many victims of his devious schemes,” said U.S. Attorney Randy Grossman. “It’s now his turn to pay the price for his crimes.”
Avergoon admitted to participating in real estate Ponzi schemes from 2010-2016, cheating retirement investors out of a total of $12 million. Using his real estate industry knowledge and reputation, Avergoon convinced investors they were purchasing rental properties that would earn monthly dividends. He then had clients sign off on having the promised earnings invested in passive-income retirement accounts. When an investor would ask to cash out, he encouraged them, often successfully, to re-invest,
According to the Justice Department, Avergoon spent the money himself and just pretended that he had purchased the apartment buildings and office space he advertised. In true Ponzi fashion, Avergoon made the promised dividend payments—but rather than using rent income, he funded those payments using new investor money.
Avergoon even went so far as to convince investors to part with millions by pretending to use their money to fund short-term, low-risk loans supposedly secured by the borrowers’ high-end San Diego homes. Of course, in reality, there were no “borrowers.”
Avergoon used his real estate connections to identify homes he could pose as collateral and
doctored up fake loan agreements and forged the borrowers’ signatures. The Justice Department notes that in some cases, the individuals he claimed were the borrowers did not even own the homes that were used as so-called collateral.
As part of his guilty plea, Avergoon also admitted to participating in multiple tax evasion and fraud schemes with Rabbi Yisroel Goldstein, former director at Chabad of Poway.
Avergoon pleaded guilty in July 2020.