Developer Sentenced to 10 Years for Investment and Bankruptcy Fraud
PHOENIX – Yesterday, John Keith Hoover, age 64, of Mohave Valley, Ariz., was sentenced to 10 years in prison by U.S. District Judge Susan R. Bolton. His wife, Deborah B. Hoover, also 64, of Mohave Valley, Ariz, was convicted of conspiracy to commit bankruptcy fraud and was sentenced to one year of home confinement followed by five years of supervised release.
U.S. Attorney John Leonardo stated, “This investment fraud was particularly reprehensible because it targeted a number of widows and other friends of the defendants who trusted the defendant’s investment and legal advice. Defendants also violated the integrity of the U.S. Bankruptcy Court by shielding assets from victim creditors who were entitled to them by law. This prison sentence imposes accountability on the defendants for their crimes and sends a message to others who would engage in such fraudulent misconduct at the expense of others.”
"This investigation highlights the need for consumers and investors to do their homework before entering into business arrangements and not simply take the word of someone who may be out to steal their hard-earned money. If something seems too good to be true, it almost always is. I want to thank the IRS and the United States Attorney’s Office for their important role and partnership in this investigation. At its most basic level, this is a case about greed and the abuse of trust. The subjects took advantage of trusted relationships to persuade the victims to invest in staged real estate ventures which were supported by lies and false documents,” stated FBI Special Agent in Charge Douglas G. Price.
"Mr. Hoover financed his lavish lifestyle by swindling investors. IRS Special Agents will continue to investigate investment fraud schemes in order to deliver justice to victims and protect the integrity of the U.S. financial system,” stated IRS-CI Special Agent in Charge Ismael Nevarez Jr.
According to the Superseding Indictment, Defendant’s plea, and other filings, John Hoover was a homebuilder in Fort Mohave and surrounding areas. Hoover created nearly two dozen companies that he used to solicit money from Arizona and California investors for bogus real-estate developments beginning in 1997. Several investors were widows who gave Hoover control of the bulk of their estates based on his friendship with their families and because of the trust he developed as an attorney. Hoover told investors their money would go to specific real-estate developments and then diverted the money for his own personal use. In some cases, Hoover told investors that their money had been placed in secure loans while he actually used it to invest in his own high-risk, speculative real-estate ventures in Arizona.
Hoover encouraged investors to liquidate retirement accounts, life-insurance policies, mutual funds and securities, and Social Security death benefits to fund their investments with him. Hoover then used investor money to pay his living expenses. Among those expenses were a multimillion-dollar Newport Beach, Calif. home and a condominium; an apartment in Paris; a $200,000 Bentley Flying Spur and other high-end automobiles; jewelry; artwork; furnishings; high end hotels and restaurants; and lavish expenditures for family members living in Paris, France. Hoover also took vacations disguised as business trips to Hawaii, China, South America, and Europe.
When Hoover ran out of money, he refinanced properties with false representations about salary, assets, liabilities, employment, and sources of down payments. Then, he and his wife filed bankruptcy while hiding assets. When the Hoovers were arrested, agents located numerous assets that had been concealed from the Bankruptcy Court.
The investigation in this case was conducted by the Internal Revenue Service-Criminal Investigation and the Federal Bureau of Investigation. The prosecution was handled by Assistant U.S. Attorney Kevin M. Rapp and Special Assistant U.S. Attorney Jennifer A. Giaimo.
CASE NUMBER: CR-14-CR-00554-SRB
RELEASE NUMBER: 2015-005_Hoovers
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