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Press Release

West Linn Man Pleads Guilty for Role in Real Estate, Agriculture, and Mining Investment Schemes

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

PORTLAND, Ore.—A West Linn, Oregon man pleaded guilty today for posing as a successful real estate developer, hemp seed cultivator, and owner of a precious metals mining venture to fraudulently obtain millions of dollars from individual investors and lenders.

David A. Shelofsky, 53, pleaded guilty to one count each of wire fraud and money laundering.

According to court documents, beginning in 2013, in Oregon and elsewhere, Shelofsky knowingly and intentionally devised several different investment fraud schemes. Shelofsky falsely told prospective investors and lenders that he had successful real estate development projects in Bend, Oregon and West Linn and a successful hemp seed cultivation and distribution venture in West Linn. During the same time period, Shelofsky and two other individuals formed a precious metals mining operation that purportedly used a proprietary mining technique to extract precious metals from the sand tailings of other mining operations. While the group made minimal efforts to operate the venture, Shelofsky misled several investors about the status of the operation to fraudulently obtain funds.

Shelofsky made repeated and deliberate misrepresentations and false promises about the status and success of his various ventures, the purported returns investors would receive, and the existence of collateral pieces of real estate supposedly backing investments. Shelofsky employed the services of others to further his schemes and establish his credibility, including a lawyer to create legal documents and an assistant to open bank accounts in the names of several limited liability corporations. Shelofsky used investor funds for personal expenses and to support his own high standard of living. Dozens of individual investors and lenders lost millions of dollars as a result of Shelofsky’s schemes.

On June 5, 2020, Shelofsky was charged by criminal complaint with wire fraud and money laundering. Later, on October 20, 2020, a federal grand jury in Portland returned a 17-count indictment charging Shelofsky with wire fraud and money laundering.

Shelofsky faces a maximum sentence of 30 years in prison; a $500,000 fine or twice the gross pecuniary gains or losses resulting from his offense, whichever is greater; and three years of supervised release. He will be sentenced on November 12, 2021 before U.S. District Court Judge Michael H. Simon.

As part of the plea agreement, Shelofsky has agreed to pay no less than $3.3 million in restitution to his victims and forfeit any criminally derived proceeds identified by the government prior to sentencing. Under the terms of the plea agreement, the government can and will argue for a restitution order greater than $3.3 million, but not to exceed $16 million.

Acting U.S. Attorney Scott Erik Asphaug of the District of Oregon made the announcement.

This case was investigated by IRS Criminal Investigation and the FBI. Assistant U.S. Attorney Claire M. Fay is prosecuting the case.

Updated August 26, 2021

Securities, Commodities, & Investment Fraud