Two Gig Harbor men have been convicted in federal court of running a scheme to defraud would-be real estate developers and investors out of millions.
A jury in New York earlier this month found Brad A. Russell, 42, guilty of two counts of conspiracy to commit wire or securities fraud and one count of securities fraud. The same jury convicted Kristofor Lange, 30, of one count of conspiracy to commit wire or securities fraud and one count of securities fraud.
The men face up to 20 years in prison when sentenced later this year.
Two other men charged in the case, William Lange and Frank Perkins, are scheduled to go to trial in September.
Federal prosecutors contend the men’s schemes netted $9 million from nearly 300 people.
Prosecutors argued that Russell, operating through a company called Harbor Funding Group Inc., told potential land developers in areas devastated by Hurricane Katrina that the company had money available to finance their projects. The developers were required to put 10 percent of the loan amount into an escrow account to qualify, court records show.
Russell and others then kept the escrow money and provided no loans to applicants.
Kristofor Lange and Russell, using webinars, cold calls and in-person presentations, also duped people into investing in a phony Alaskan gold mine, court records show.
“Through lies and deceit, the defendants took advantage of a national tragedy and unsuspecting investors and stole millions of dollars so they could line their own pockets,” Loretta Lynch, the U.S. Attorney for the Eastern District of New York, said in a news release. “Their representations and assurances were not worth the price of the paper used to print the loan documents and stock certificates.”