Brody Sentenced To 41 Months In Prison In Connection With Real Estate Investment Scheme
SALT LAKE CITY – Patrick Merrill Brody, age 47, of Salt Lake City, who pleaded guilty in May to wire fraud and money laundering in connection with a real estate investment scheme, will serve 41 months in federal prison.
U.S. District Judge Robert J. Shelby, who imposed the sentence Thursday in federal court, also ordered Brody to pay restitution of $1,331,075.36 to victims in the case and serve 36 months of supervised release when his prison sentence concludes.
Brody was charged with conspiracy, mail and wire fraud, and money laundering in a nine-count indictment returned by a federal grand jury in October 2012. The indictment alleged Brody and his wife, Laura Ann Roser, operated Art Intellect, Inc., a Utah corporation doing business as Mason Hill. The business had offices in Salt Lake City and Cape Coral, Florida. Mason Hill solicited and sold investments in real estate properties. It offered potential clients an option for investing in rental residential properties in several states. Mason Hill offered to sell investors rental properties at a low price, repair and rehabilitate them if necessary, find renters for the properties, collect rent, and maintain and manage the properties for the benefit of the investors.
The indictment alleged that once received, investors’ funds were comingled with other investors’ money, used to purchase properties for earlier investors, and used to pay operating expenses of Mason Hill as well as personal expenses for the defendants – among other things. In some instances, investors’ money was used to make Ponzi payments to earlier investors.
As a part of a plea agreement reached with federal prosecutors, Brody admitted that from April 2009 through early 2011 he made important business decisions for the company, hired and instructed employees, and directed the use of company proceeds.
Brody admitted that the company ultimately began operating a scheme that obtained money or property through fraudulent representations or promises. The fraudulent representations were made with the intent to induce clients to make investment payments to Mason Hill. Funds invested through the scheme were converted to personal use by Brody, which deprived the company of the capital necessary to complete real estate transactions as promised. Many of the clients, who invested in the scheme, did not receive any property or any other thing of value in return for their investment payments, and did not receive a refund of their payments.
Roser pleaded guilty in June to a one-count Misdemeanor Information charging her with inducing or attempting to induce the purchase and sale of a security without being registered as a broker-dealer with the U.S. Securities and Exchange Commission and without being associated with a broker-dealer registered with the Commission, but in doing so, the defendant had no knowledge of such registration requirement. Roser is scheduled to be sentenced Aug. 22, 2013, at 2 p.m. in Judge Shelby’s courtroom.
The case is being prosecuted by the U.S. Attorney’s Office and investigated by special agents of the FBI and IRS Criminal Investigation.