A Mission Viejo man has agreed to plead guilty to taking more than $2,300,000 from investors in a fraudulent real estate investment scheme in which he used investor funds to pay for personal expenses, including travel and cosmetic surgery, to make cash withdrawals, and to make Ponzi-style payments to other investors.
Francisco “Frank” Hobson, 39, was named in a criminal information Friday charging him with wire fraud. A plea agreement in the case was also files, and, in the plea agreement, Hobson has agreed to plead guilty to the information and pay at least $1,584,941 to the victims of his crime.
The information charges Hobson, who was at the same time a licensed real estate agent, in connection with his scheme of luring victims to give money, between December 2010 and June 2016, with his promises that their investments would be used to purchase properties. In reality, the properties that Hobson advertised to his victims were not actually for sale or simply did not exist, and Hobson sent victims purported purchase agreements for the properties which were fraudulent or forged.
Hobson continued to engage in the scheme for months after being interviewed in November 2015 by the Federal Bureau of Investigation in connection with complains from two of his victims.
As detailed in the plea agreement, Hobson would tell investors to transfer money to “escrow accounts,” which were, in reality, his own bank accounts that he alone controlled. After the investors’ money was deposited in his accounts, Hobson used the money for personal purchases at grocery stores, chain restaurants, and retail stores, as well as making cash withdrawals. Hobson also used their money to pay his landlord, and for travel, laser hair removal, and plastic surgery. Furthermore, Hobson paid approximately $757,031 of the$2,339,473 he collected in the scheme to his victims as Ponzi-style payments designed to conceal and extend the length of the scheme.