A fraudulent investment that has now turned surprisingly solid.
By Raif Karerat
WASHINGTON, DC: Two years after two brothers-in-law were charged in a $96 million securities fraud case that The New York Times described as a “Ponzi-meets ‘Producers'” scheme and sunk the majority of the stolen funds into the Panoramic View, a resort in upstate N.Y., their victims stand a chance to recoup some of their losses, a rarity in fraud cases.
As it stands, the Panoramic View turned out to be a solid investment, and according to The Times, the government, the victims, the defendants, and a federal judge are in agreement — the federal government should sell the property at a marked up price.
According to the 2013 indictment — records of which were previously obtained by CNBC — Brian R. Callahan and his brother-in-law Adam J. Manson’s massive expenditures didn’t stop at propping up the Panoramic View when the property began to falter. Callahan allegedly used $3 million of investor’s money for his own benefit, including large credit card bills, dues at his golf club, down payments toward the purchase of luxury homes, and payments for a Range Rover and a BMW.
Callahan also allegedly used $475,000 to buy a minority partnership interest in his own name in a company that published archived church sermons.
Prosecutors alleged the two co-conspirators deceived their auditor by doctoring closing statements for co-op sales and creating fake promissory notes to make it look as though Callahan’s funds were profitable and to hide what they owed on the Panoramic View.
“Callahan even posed as someone else, using a fake email address and a different telephone number, when the auditor had questions about where some of the money had gone,” reported The Times.
Callahan pleaded guilty to securities fraud and wire fraud in 2014; he faces a maximum of 40 years in prison when he is sentenced. Manson pleaded guilty the same year to conspiracy to commit securities fraud, and he faces a maximum of five years. Both sentencing hearings are scheduled for October.