Edward Showalter, who was accused of defrauding over 100 investors out of $16 million in a real estate scam, was sentenced to almost 13 years in prison by a court. He had pled guilty to wire fraud in response to civil charges by the SEC and was also ordered by the court to pay over $15 million in restitution to his victims.
Using his firm High Park, which purported to be an expert in rehabbing distressed properties, and Harbor Financial, which was the supposed source of funding, Showalter placed advertisements in the Orange County Register and the Los Angeles Times.
The Commission’s complaint claimed that Showalter solicited Investments of at least $50,000 for High Park. But instead of using the investors’ funds for distressed real estate, he commingled their money and lied to them.
Investors were guaranteed monthly returns and claimed that the investments would be secured by second trust deeds. In actuality some of the trust deeds were never recorded and others had many as twenty or thirty investors in the second position.
This is not Showalter’s first run-in with the SEC, which had sued him in 1998 for running a similar scam. In June 2002, a court found Showalter in civil contempt of the 2001 order requiring him to pay $900,000 in restitution. He finally paid the prejudgment interest and civil penalties in July and August 2004.
Read the Full Article.