A Virginia man has admitted to running a Ponzi scheme that defrauded more than 20 victims of more than $1.4 million, according to the US Attorney’s Office for the Eastern District of Virginia.
Brian Sapp ran a company called Novus Properties, which claimed to have relationships with banks and mortgage lenders who wished to sell distressed lender-owned single-family residences in Virginia, Maryland, and the District of Columbia.
Targeting close friends and their family who trusted him, Sapp raised capital to purportedly purchase the homes. He claimed he would resell the properties at a substantial profit, promising rates of return as high as 25%. Sapp also falsely claimed to have a guaranteed buyer for all his properties.
To execute the scheme, Sapp stole the identity of the president of a construction company. He executed false contracts between Novus and the construction company, sending these to victims along with falsified HUD-1 Settlement Statement summaries.
Altogether, Sapp executed hundreds of false real estate transactions to induce victims to part with their money. He used the proceeds to buy a Mercedes, take golf vacations, and to make lulling payments to investors.
Sapp pleaded guilty to wire fraud and to aggravated identity theft. He faces a mandatory minimum penalty of two years in prison for the identity theft charge and up to 20 years for the wire fraud charge. He is scheduled to be sentenced on March 15.