LOS ANGELES– A Mission Viejo man who admitted taking more than $2.3 million from investors in a fraudulent real estate investment scheme has been sentenced to 78 months in federal prison.
Francisco “Frank” Hobson, 40, who admitted to engaging in a fraudulent scheme in which he used real estate investor funds to pay for personal expenses and to make Ponzi-style payments to other investors, was sentenced yesterday by United States District Judge Percy Anderson. In addition to the 6½-year prison sentence, Judge Anderson ordered Hobson to pay approximately $1.61 million in restitution to 26 victims.
Hobson pleaded guilty in October to one count of wire fraud, admitting that he solicited money from investors with false promises to purchases properties, including a residence in Lakewood that was not actually for sale and a non-existent home in Downey.
Calling the defendant’s crimes “cold-hearted,” Judge Anderson said that Hobson was motivated by a desire for “a bigger house and bigger car,” and that Hobson’s actions demonstrated that he was “totally absorbed in his self and family at the expense of victims.”
At the time of the scheme, from late 2010 through July 2016, Hobson was a licensed real estate agent who lured victims with false promises that their investments would be used to purchase properties. However, the properties that Hobson promised to purchase for his victims were not for sale or simply did not exist, and the purchase agreements he sent to the victims were bogus. Additionally, Hobson continued to engage in the scheme for months after being interviewed in November 2015 by special agents with the Federal Bureau of Investigation, which had received complaints from two of his victims.
“The audacity of this defendant to continue his scheme after being interviewed by the FBI is shocking, and no doubt contributed to the significant sentence imposed by the court,” said United States Attorney Eileen M. Decker. “After that FBI interview in November 2015, the defendant went on to steal more than a half-million dollars from another family, money that was used to fund a lavish lifestyle and make payments to other victims.”
According to court documents, Hobson told investors to transfer money to “escrow accounts,” which were actually his own bank accounts. After the investors deposited their money, Hobson used the funds for personal expenses that included rent, travel, laser hair removal and plastic surgery.
“Mr. Hobson was motivated by greed that was not satisfied even after he knew his scheme was uncovered,” said Deirdre Fike, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “This lengthy sentence should send a message to those using positions of trust to target certain groups through affinity schemes and should serve as a reminder to potential victims that extensive research is necessary before savings are turned over to individuals who promise large returns on investments and claim to be trustworthy.”
Out of the more than $2.3 million he collected as part of the scheme, Hobson paid out approximately $750,000 to his victims as Ponzi-style payments designed to conceal and extend the length of the scheme.
The case against Hobson was investigated by the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorney Anil J. Antony of the Cyber and Intellectual Property Crimes Section.