Woman Admits to Defrauding 400 Investors Out of Millions of Dollars
Patricia Morgen has been sentenced to 15 years and 8 months in prison after
admitting to defrauding over 400 investors out of millions of dollars.
Supposedly, Ms. Morgen had made false promises of real estate profits.
Ms. Morgen was sentenced on Thursday, May 20, 2010, by a federal judge in San Francisco. U.S. District Judge Charles Breyer also ordered her to pay back over $9 million to her victims. Some of these investors had lost their life’s savings. To date, investors have only been repaid $620,000, after a court-appointed receiver salvaged and sold the assets remaining from Ms. Morgen’s company, Chicago Development and Planning.
According to the allegations against Ms. Morgen, she had told her investors that their money would be used to purchase property in the Reno area. She also guaranteed profits. However, instead of using the money for that purpose, she allegedly operated a Ponzi scheme, by using the money from new investors to pay earlier investors. Ms. Morgen was accused of keeping some of the money for her and certain employees.
Prosecutors also alleged that Chicago Development and Planning fraudulently obtained over 20 properties by falsifying mortgage documents and inflating property values. Ms. Morgen and her employees were believed to have lived rent-free in these properties.
After being arrested in 2008, she pleaded guilty to money laundering, mail fraud and wire fraud.