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California Real Estate Developer Sentenced to 15 Months for Making Conduit Contributions in Two U.S. Congressional Campaigns

Department of Justice
Office of Public Affairs

FOR IMMEDIATE RELEASE
Friday, January 24, 2020

California Real Estate Developer Sentenced to 15 Months for Making Conduit Contributions in Two U.S. Congressional Campaigns

Oakland-area real estate developer James Tong was sentenced to 15 months today for funneling tens of thousands of dollars of his own money through straw donors into two consecutive congressional campaigns for a member of the U.S. House of Representatives.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, United States Attorney David L. Anderson for the Northern District of California, and Special Agent in Charge John F. Bennett of the FBI’s San Francisco Field Office made the announcement. 

Tong, 74, of Fremont, California, was sentenced by U.S. District Judge Jon S. Tigar of the Northern District of California.

A federal jury convicted Tong on Oct. 8, 2019, of two counts of making contributions to a federal campaign in the names of other individuals.  According to the evidence presented at trial, in 2012 and 2013 Tong made $38,000 in conduit contributions to the initial and reelection campaigns of a candidate who was running for the U.S. House of Representatives.  Tong provided envelopes of cash to his bank manager and another business associate and directed them to give the cash to individuals in the community, who then used Tong’s cash to write checks in their own names to the campaign for the U.S. congressional candidate Tong was supporting.  Tong leveraged financial obligations and the implied loss of business opportunities to induce his bank manager and business associate to distribute cash in the community to be donated.  The network of straw donors included dozens of conduits, including at least one foreign national who was not eligible to make donations to federal elections.  Tong also directed his middlemen to conceal the scheme by instructing the straw donors not to deposit the cash; and he later directed one of the middlemen to withhold information from the FBI after he was interviewed. 

On Aug. 31, 2017, a federal grand jury indicted Tong charging him with two counts of making and causing campaign contributions in the name of another, in violation of 52 U.S.C. §§ 30122 and 30109(d)(1)(D).  The jury found Tong guilty of both counts.

As part of the sentence, Judge Tigar found that Tong obstructed justice when he told his middlemen to not deposit cash given to them. Judge Tigar also sentenced the defendant to a one-year period of supervised release and a $380,000 fine. 

The FBI conducted the investigation.  Trial Attorneys Amanda R. Vaughn and Rebecca G. Ross of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney S. Waqar Hasib of the Northern District of California prosecuted the case.


Source: https://www.justice.gov/opa/pr/california-real-estate-developer-sentenced-15-months-making-conduit-contributions-two-us



Department of Justice
Office of Public Affairs

FOR IMMEDIATE RELEASE
Tuesday, October 8, 2019

California Real Estate Developer Convicted of Making Conduit Contributions in Two U.S. Congressional Campaigns

Today, a federal jury found an Oakland-area real estate developer guilty for funneling tens of thousands of dollars through straw donors into two consecutive congressional campaigns for a member of the U.S. House of Representatives. 

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, United States Attorney David L. Anderson for the Northern District of California and Special Agent in Charge John F. Bennett of the FBI’s San Francisco Field Office made the announcement.  

After a 10-day trial, James Tong, 74, of Fremont, California, was found guilty of two counts of making conduit contributions.  According to the evidence presented at trial, in 2012 and 2013 Tong used two primary straw donors as recruiters for his conduit scheme.  Tong leveraged financial obligations and the implied loss of business opportunities to induce these individuals to distribute cash in the community to be donated to the initial and reelection campaigns of a candidate who was running for office in the U.S. House of Representatives.  The network of straw donors included dozens of conduits who agreed to write checks in exchange for a commensurate amount of cash sourced from Tong.  Tong provided envelopes of cash to the two intermediaries and directed them to reimburse individuals for their contributions.  Tong also directed an intermediary to conceal the scheme by instructing the conduits not to deposit the cash and later directed the intermediary to withhold information from the FBI after he was interviewed.  

Sentencing has been scheduled for Dec. 13.    

The FBI conducted the investigation.  Trial Attorneys Amanda R. Vaughn and Rebecca G. Ross of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney S. Waqar Hasib of the Northern District of California prosecuted the case.





Department of Justice
U.S. Attorney’s Office
Northern District of California

FOR IMMEDIATE RELEASE
Wednesday, July 3, 2019

Bay Area Real Estate Agent Indicted For Defrauding Homebuyers Out Of Down Payments

Agent Allegedly Used All-Cash Offer Loan Promises To Lure Homebuyers & Obtain Down Payments

OAKLAND— A federal grand jury in Oakland indicted real estate agent Min Jin Zhao, a/k/a Michael Zhao, a/k/a Michael West, on charges of wire fraud, mail fraud, and money laundering, announced United States Attorney David L. Anderson; Internal Revenue Service, Criminal Investigation (IRS-CI), Special Agent in Charge Kareem Carter; and Federal Bureau of Investigation (FBI) Special Agent In Charge John F. Bennett. 

According to the indictment filed May 9, 2019, and unsealed today, Zhao, 56, of San Francisco, is a real estate agent working in the Bay Area who defrauded his clients out of down payments meant for the purchase of homes in and around the Bay Area.  From 2014 through 2015, Zhao misrepresented to prospective homebuyers and investors that Portfolio Consulting, Inc., offered a loan program that would enable his clients to procure financing to make all-cash offers on real property.  Zhao told his victims that, as part of the loan program, they had to wire, transfer, or deposit 10% to 20% of the sale price of the real property they sought to purchase into Portfolio’s bank account.  According to the indictment, Zhao told his clients that once they delivered their funds to Portfolio, the company then would provide the remaining portion of the purchase price.  In reality, however, after Zhao’s victims deposited their funds into Portfolio’s account, Zhao either spent the funds or transferred the funds to another bank account in Portfolio’s name.  Further, Zhao used the funds to make purchases unrelated to the purchase of real property for the victims, including for purchases for Zhao’s benefit and the benefit of businesses he controlled.  In sum, Zhao is charged with three counts of wire fraud, in violation of 18 U.S.C. § 1343; two counts of mail fraud, in violation of 18 U.S.C. § 1341; and one count of money laundering, in violation of 18 U.S.C. § 1957.


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Zhao was arrested in San Francisco on July 2, 2019, and made his initial federal court appearance this morning in Oakland.  Zhao is currently out on bond.  His next scheduled appearance is on September 11, 2019, at 10:30 a.m., for an initial appearance before the Honorable James Donato, U.S. District Judge.    

An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.  If convicted, Zhao faces a maximum sentence of 20 years in prison and a fine of $250,000, plus restitution for each violation of wire and mail fraud, as well as 10 years in prison and a fine of $250,000, plus restitution for the money laundering count.  However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.  

Assistant U.S. Attorney Jose Apolinar Olivera is prosecuting the case with the assistance of Jessica Rodriguez Gonzalez and Katie Turner.  The prosecution is the result of an investigation by the IRS-CI and the FBI. 


Source: https://www.justice.gov/usao-ndca/pr/bay-area-real-estate-agent-indicted-defrauding-homebuyers-out-down-payments



Department of Justice
Office of Public Affairs

FOR IMMEDIATE RELEASE
Thursday, February 21, 2019

Nine Real Estate Investors Sentenced for Rigging Bids at Mississippi Public Foreclosure Auctions

Nine real estate investors have been sentenced for their role in a conspiracy to rig bids, in violation of the U.S. antitrust laws, at public real estate foreclosure auctions in Southern Mississippi, the Department of Justice announced.

Today, Christopher Vaughan and Jon Gregg Goodhart Jr. were each sentenced to serve four months in prison, with Vaughan receiving a fine of $20,000. Both defendants were ordered to pay restitution. Separately, but as a result of the same investigation, Jason Boykin, Shannon Boykin, Kimberly Foster, Kevin Moore, Chad Nichols, Ivan Spinner, and Terry Tolar were each sentenced to a term of four months in prison on Jan. 17, 2019, and were ordered to pay fines ranging from $20,000 to $48,000 and restitution to victims of their crimes. 


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At various times between 2009 and 2017, according to court documents, these defendants and others conspired not to bid against each other for properties sold at public real estate foreclosure auctions.  Instead, they designated a winning bidder for the property and made and received payoffs in exchange for their agreement not to bid.  When properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with any remaining proceeds paid to the homeowner.  These conspirators paid and received money in connection with their agreement to suppress competition, which artificially lowered the price paid at auction for such homes.

“Those who subvert the competitive process will be held accountable and violations of the nation’s antitrust laws will be taken seriously,” said Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division.  “The Division has prosecuted more than 100 individuals across the country for bid rigging at real estate foreclosure auctions, and we will continue our efforts to prosecute and deter this conduct.”        


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“These types of crimes affect all Americans, because when individuals rig bids at auction, it ultimately damages our economy and hurts individuals,” said Christopher Freeze, Special Agent in Charge of the FBI in Mississippi. “We want to send a clear message to those participating in this type of corruption: the FBI and Department of Justice will investigate and prosecute anyone betraying the trust of our country’s economic foundation.”

“There is a simple lesson from these cases – if you rig bids, you will be caught and you will be punished.  These are not victimless crimes, as we all suffer when people violate our antitrust laws.  I want to thank the FBI and the Antitrust Division for rooting out this corruption in our foreclosure auctions here in Mississippi. We will remain vigilant against these and other types of crimes as we move forward in protecting the public,” said United States Attorney Mike Hurst for the Southern District of Mississippi.



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The sentences announced today resulted from an ongoing investigation being conducted by the Antitrust Division’s Washington Criminal II Section and the FBI’s Gulfport Resident Agency, with the assistance of the U.S. Attorney’s Office for the Southern District of Mississippi.  Anyone with information concerning bid rigging or fraud related to real estate foreclosure auctions should contact the Antitrust Division prosecutors in the Washington Criminal II Section at 202-598-4000, or visit https://www.justice.gov/atr/report-violations.







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