Written by The Business Journal Staff
A Clovis man pleaded guilty today to federal charges relating to a real estate investment Ponzi scheme worth $24 million.
Seth Adam Depiano, 36, admitted to defrauding investors of about $24 million, and agreed to pay restitution to 28 investors. He also agreed to forfeit more than $700,000 seized from several bank accounts and cash, and a baseball card collection valued at more than $31,000.
According to court documents, Depiano operated a Ponzi scheme that lured real estate investors to give money to Depiano and the businesses he controlled, including The Rental Group, US Funding and Home Services LLC, and Draymond Homes. Depiano fraudulently promised investors that he would use their money to purchase residential properties and either manage the properties for rental income or arrange for them to be renovated and resold.
In many cases, Depiano promoted the properties to investors with documents that falsely represented high occupancy rates. Depiano oftentimes had no authority to purchase or sell the properties and misled investors with fraudulent documents misrepresenting the properties’ ownership. Some of the properties Depiano marketed to investors did not even exist.
Depiano frequently used the investors’ money to pay his personal expenses, fund his gambling activities and finance the settlement of the investors’ civil lawsuits. He also paid investors purported rental income that, in fact, was money other investors gave to Depiano for investment purposes.
Depiano is scheduled to be sentenced by U.S. District Judge Dale A. Drozd on May 29 at 1:30 p.m. in federal court in Fresno. Depiano faces a maximum statutory penalty of 20 years in prison for the mail fraud and wire fraud charges, ten years in prison for money laundering, and a $250,000 fine. Clovis man pleads guilty in $24M scheme, puts up baseball cards as restitution.