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Press Release

Phoenix Financial Planner and Fund Manager Both Sentenced to Prison for Fraud

For Immediate Release
U.S. Attorney's Office, District of Arizona

     PHOENIX – Yesterday, Rolf Heartburg, 41 and Larry Heartburg, 68, of Scottsdale, Ariz., were both sentenced by U.S. District Court Judge Neil V. Wake to a year in prison and ordered to pay $257,000 in restitution. Rolf Heartburg previously pleaded guilty to one count of conspiracy to commit wire and mail fraud and Larry Heartburg previously pleaded guilty to five counts of willfully failing to file a tax return. Rolf Heartburg was immediately taken into custody following the imposition of his sentence.

     "Unfortunately, the problem of investment scams targeting the elderly is rampant,” said John S. Leonardo, United States Attorney.  “This case sends a strong message that the United States Attorney’s Office will make every effort to uncover frauds by investment managers against vulnerable members of our community and we will prosecute the unscrupulous perpetrators of such frauds. I commend the IRS for its fine work in interrupting this fraud before more clients were victimized."

      “Rolf Heartburg exploited his position of trust as a financial advisor by directing the victim investors to a risky real estate investment controlled by his father Larry who used the money for this own personal expenses,” said IRS Criminal Investigation Special Agent in Charge Dawn Mertz. “Larry Heartburg then failed to file income tax returns and failed to pay taxes on that income.  Honest and law abiding citizens are fed up with those who use deceit and fraud to line their pockets with other people’s money and then skirt their own tax obligations.”

     Rolf Heartburg was a Phoenix based financial planner who solicited his own clients to invest in a speculative real estate fund.   The fund allegedly generated profits by selling mortgage notes it had acquired at a discount. Unbeknownst to the investors, Larry Heartburg served as the manager of the fund and he did not purchase any mortgage notes. Instead, the Heartburgs used nearly two thirds of investor money for their own personal expenses.  Additionally, Larry Heartburg failed to file taxes on the money received from investors and other income for tax years 2008-2012.

     The investigation in this case was conducted by the Internal Revenue Service-Criminal Investigation.  The prosecution was handled by Assistant U.S. Attorney Kevin M. Rapp.


CASE NUMBER:           CR-13-CR-01461-NVW

RELEASE NUMBER:   2015-032_ Heartburg et al

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Updated April 21, 2015

Press Release Number: 2015-032_ Heartburg et al