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Press Release

Former Hillsborough Resident Sentenced To 51 Months In Prison For Investment Fraud Scheme

For Immediate Release
U.S. Attorney's Office, Northern District of California
Defendant Admitted Causing Up To $3.5 Million In Losses To Victims.

SAN FRANCISCO—Michael James Frew was sentenced to 51 months in prison on wire fraud, mail fraud, and money laundering charges in connection with a fraudulent real estate investment scheme, announced United States Attorney David L. Anderson, Federal Bureau of Investigation Special Agent in Charge John F. Bennett, and Special Agent in Charge of the Internal Revenue Service, Criminal Investigation (IRS-CI), Kareem Carter.  The sentence was handed down by the Honorable Vince Chhabria, U.S. District Judge, and included 3 years of supervised release to follow imprisonment, $500 in special assessments, and restitution in an amount to be determined.

According to the plea agreement, Frew, 70, formerly of Hillsborough, Calif., admitted that between 2010 and March of 2014, he solicited investments from numerous individuals on the false premise that he would invest their money in real estate.  Frew sometimes claimed the real estate was in foreign countries and usually explained that the areas in which he would invest recently had been struck by a natural disaster.  In truth, Frew did not invest his victims’ money in real estate.  Instead, he used the money to speculate in the stock market, to make expenditures for personal expenses, and to repay other victim “investors.”  Frew admitted that on several occasions he paid some of the money back to investors to make it seem like their investments were legitimate, which lulled his victims into a false sense of security that their money was properly invested.  He further admitted he caused losses to his victims of up to $3.5 million.

A federal grand jury indicted Frew on July 26, 2018, charging him with two counts each of wire fraud, in violation of 18 U.S.C. § 1343; mail fraud, in violation of 18 U.S.C. § 1341; and money laundering, in violation of 18 U.S.C. § 1957.  Frew pleaded guilty to all the charges except one count of mail fraud.  Judge Chhabria dismissed the remaining charge at sentencing.  Judge Chhabria scheduled a hearing to determine issues regarding restitution for October 16, 2019, at 1:30 p.m.

Assistant U.S. Attorney Robert David Rees is prosecuting the case with assistance from Kathy Tat.  The prosecution is the result of an investigation by the Federal Bureau of Investigation and the IRS-CI. 
 

Updated August 26, 2019