Two Sentenced to Federal Prison for $5 Million Real Estate Ponzi Scheme
ATLANTA - September 29, 2015 - Charles Wooden and Hendrickx H. Toussaint, a now disbarred lawyer, have been sentenced to federal prison for operating a real estate-based Ponzi scheme that took in almost $5 million dollars from out-of-state and foreign investors.
“These defendants tricked investors into handing over millions of dollars by promising quick returns and an income stream,” said U.S. Attorney John Horn. “To make their scheme work, they preyed upon the common belief held by many investors that real estate is a safe investment. Sadly, this case proves that criminals will say anything to persuade a person to part with their money, and that investors should always be skeptical of offers that sound too good to be true.”
“While so much of the financial harm in cases like this is unrecoverable, the FBI hopes that today’s sentencing provides some degree of relief to the many investors turned victims that now suffer from the greed fueled criminal conduct of these two defendants,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.
“The U.S. Postal Inspection Service has no shortage of Ponzi schemes to investigate and this is just another example of greed overcoming honest business practices,” said Thomas Noyes, Inspector in Charge, Charlotte Division. He added, “Relying on a reputation or relationship is not enough, investors must still verify information, especially if there are claims of outperforming the market.”
According to U.S. Attorney Horn, the charges, and other information presented in court: In or about 2009, Charles Wooden, doing business as Aeon Capital Management, LLC, held himself out to the public as a real estate broker who could locate and oversee the purchase of residential properties and apartment buildings for or on behalf of real estate investors. Wooden purported to find properties that could be flipped in a short period for a profit, and also properties that he would manage for the investors.
Wooden’s property management services allegedly included renting the properties to tenants, collecting rent, and forwarding investors their share of the rental funds. Wooden introduced and described Hendrickx Toussaint, who was an attorney at the time, to real estate investors as the attorney who would escrow investor funds and close real estate purchases for Wooden and the investors. As the escrow agent, Toussaint agreed to hold funds from investors and disburse such funds to purchase real estate for the investors’ benefit.
Between 2009 and 2012, multiple out-of-state and foreign investors invested over $5 million with Wooden and Toussaint for the purchase of Atlanta, Georgia, area real estate. Although Wooden purchased some properties for investors, Wooden and Toussaint did not use the vast majority of investors’ funds as they had promised and represented to the investors. In addition to funding his personal lifestyle and business, Wooden used funds from investors to pay “profits” from short-term real estate “flips,” that in fact never occurred, and to pay rental income to investors from properties that in fact had not been purchased. When one out-of-state investor sued Wooden, he used funds obtained from another victim to settle the out-of-state investor’s lawsuit.
Wooden, Toussaint, and others provided fake documents to the investors to conceal that their monies had not been used to purchase real estate. These false documents included HUD-1 settlement statements, bogus real estate deeds, and in one instance, a fake bank account statement reflecting that the investor’s money was still being held in escrow. Over time, investors asked more and more questions about why public records did not reflect that they owned properties that they had been told had been purchased for them. Wooden blamed Toussaint and county recording systems, and attempted to deceive the victims further by introducing fictitious people and identities who he claimed would fix what he said were simply title recording problems.
Charles Wooden, 48, of Stone Mountain, Georgia, has been sentenced by U.S. District Court Judge Mark H. Cohen to seven years in prison to be followed by three years of supervised release, and to pay restitution of $2.4 million.
Hendrickx H. Toussaint, 44, of Decatur, Georgia, has also been sentenced by U.S. District Court Judge Mark H. Cohen to three years, ten months in prison to be followed by three years of supervised release, and to pay restitution of $1.2 million.
This case was investigated by the Federal Bureau of Investigation and United States Postal Inspection Service.
Assistant U.S. Attorney Douglas W. Gilfillan prosecuted the case.
U.S. Attorney’s Office
Northern District of Georgia
This content has been reproduced from its original source.
Berkshire Hathaway Inc. (NYSE: BRK.A) (NYSE: BRK.B) Reports Fourth Quarter and Full Year 2020
