California Attorney Sentenced to 5 1/2 Years in Prison for Multi-Million Dollar Investment Fraud.

Damian Williams, United States Attorney for the Southern District of New York, announced that DEREK JONES, a failed California attorney, was sentenced today to five and a half years in prison. . JONES operated fraudulent financial schemes, including real estate investment firms and a brokerage firm, in which he defrauded investors of more than $8.6 million over a period of more than seven years, from 2012 through 2019. JONES previously pleaded guilty to one count of wire fraud and was sentenced today in front of US District Judge Loretta A. Preska.

U.S. Attorney Damian Williams said: “When investors buy shares in real estate funds and other investments, those investors have a right to expect that the people promoting and selling those investors who are honest with them and tell them the truth about their investments. Meanwhile, Derek Jones, a failed lawyer, was sued for violating this right for a long time, selling interests in real estate he falsely claimed to own and defrauding his clients. save millions of dollars.

According to the Indictment, statements made in court, and other media documents in this case:

From at least 2012 through at least 2019, JONES defrauded his victims of investing in various companies and investments he managed, including the development of real estate and investment businesses using the trade names “BlueRidge,” “Living City,” and “Atiswin,” and the real estate brokerage firm Realize Holdings (“Realize”).

In tricking the victims into investing his money, JONES often lied to investors, including in documents and legal documents that contained false information about the properties that JONES lied about. owned or controlled by BlueRidge, Living City, and Atiswin. For example, JONES falsely told investors and potential investors that BlueRidge was developing a “hotel village” on land it owned at Semiahmoo Spit in Washington State and, in addition to , BlueRidge bought a hotel that was in that same area, but it wasn’t actually BlueRidge. or JONES owns or controls any such property. In other cases, JONES falsely claimed that his companies were under contract to buy a ranch in Colorado and that his companies had obtained long leases for various parcels of land slated for development, including California properties in Santa Monica, Hermosa Beach, and Los. Angeles. Instead of using the investor’s money as he promised, JONES misused the investor’s money, using most of the money to make Ponzi-style payments to other investors. he owed money in relation to the original trade and personal and family expenses, including private business – his children’s school fees.

In carrying out his plan, JONES also sent false and fraudulent documents to investors and others. For example, on several occasions, JONES provided certified bank statements showing that he had millions of dollars in various company accounts, when in fact he had little or nothing. money in such accounts. At other times, he provided false financial statements that were based on research in the companies he controlled. He also sent investors and other fraudulent contracts with removed homepages, real estate sales, and fictitious information on asset allocation. JONES also used other people’s names – without those people’s permission or knowledge – to communicate via email with investors and creating the appearance of JONES businesses as real projects and employees.

In total, JONES defrauded investors out of more than $8.6 million.

In the course of the fraud charged in this case, JONES was suspended from practicing law by the California State Bar Court due to prior fraud. JONES was eventually disbarred in July 2022 based on State Attorney’s Office records that he misappropriated client funds. in 2011 and he made false statements to the client, to the court, etc.

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JONES, 48, of San Marino, California, pleaded guilty on November 1, 2021, to one count of wire fraud. He was sentenced today to 5 1/2 years in prison, three years of supervised release, $8,679,787.66 in restitution, and restitution to victims. in an amount to be determined within the next 90 days.

He praised Mr. Williams the good work of the Federal Bureau of Investigation.

This case is being handled by the Office’s Fraud and Cybercriminal Unit. Assistant Attorneys David Raymond Lewis and David M. Abramowicz are handling the prosecution.

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