LAWFUEL – The Legal Newswire – An Orange County man who ran a real estate investment scam that lured victims with bogus claims of large returns on investments in commercial real estate developments was sentenced today to six years in federal prison.
Barry Landreth, 38, formerly of Coto de Caza and now of Fullerton, was sentenced this morning by United States District Judge Cormac J. Carney. A hearing has been set for August 20, 2007, to determine the amount of restitution owed by Landreth. Judge Carney ordered Landreth to surrender to custody by July 30, 2007.
At today’s hearing, six victims addressed the Court, with one man, a former student of Landreth’s at USC, saying that Landreth was a professor he trusted and went to for career advice. Several victims testified that the losses they incurred from the scheme have ruined them financially. At least one victim said he would have to work well beyond his planned retirement to recoup the money he lost to Landreth.
Landreth pleaded guilty in March to a federal wire fraud charge. By pleading guilty, Landreth, a former adjunct professor of real estate finance at the University of Southern California, admitted that he ran two schemes involving purported real estate development projects in Chicago and Las Vegas. Through his company, Webster Realty Investors, Landreth offered short-term, high-yield real estate investments in two projects that he called Discovery Chicago LLC and Discovery Las Vegas LLC. Landreth induced victims, including wealthy investors and several USC students, to invest with promises that their money would be used in one of the two projects. In fact, Landreth did not use the victims’ money for either project, but instead spent the money on business expenses for Webster Realty Investors and on personal expenses.
As part of the scheme, Landreth falsely represented to victims that the projects would provide 190 percent returns on investments within 30 days to 45 days.
In court documents, the government presented evidence that Landreth used victims’ money to buy a Cadillac Escalade and several show jumping horses.
This case was investigated by the Federal Bureau of Investigation, which received assistance from the California Department of Corporations.
CONTACT: Assistant United States Attorney Gregory Staples
Release No. 07-090