NEWS RELEASE SUMMARY – November 15, 2019
SAN DIEGO – Alexander Avergoon, a longtime San Diego real estate agent and businessman, was arraigned in federal court today following his extradition Thursday from Latvia to San Diego to face charges stemming from two investment fraud schemes in which he stole more than $12 million from unwitting investors.
Avergoon made his initial appearance today before U.S. Magistrate Judge Burkhardt. At the hearing, prosecutors moved to detain Avergoon based on his risk of flight. A detention hearing is scheduled for November 19 at 9:00 a.m. before U.S. Magistrate Judge Burkhardt.
Avergoon was indicted in August in the Southern District of California. He was located by Latvian law enforcement authorities and arrested in October. He was transferred to San Diego on Thursday.
The indictment, which was unsealed in October and provided to Latvian authorities, details Avergoon’s long-running schemes to defraud San Diego investors by pretending to use their money to buy and invest in real estate around San Diego County. Using his connections and reputation as a real estate agent, Avergoon scammed his clients and real estate investors by arranging fictitious real estate purchases and by selling them the rights to collect on fictitious loans.
From as early as 2010, Avergoon invited his victims to partner with him to purchase multi-unit apartment buildings or commercial office space, promising that the rental income would generate monthly dividends and that the investors would share in the appreciation when the properties were eventually sold. After collecting the money from investors, Avergoon told them he had purchased the buildings, and promised to service the rentals and distribute the rental income. In reality, Avergoon never actually bought these buildings; instead, he diverted the investors’ money to his own use. In order to sustain the illusion that the investment was legitimate, Avergoon made years’ worth of regular monthly payments to the investors, telling them the money came from rent payments.
In another scheme, the indictment charges that Avergoon offered additional victim investors the “opportunity” to earn approximately 8 to 20 percent interest on short-term loans to homeowners, and pretended to act as a broker between investors and homeowners. In reality, the homeowners were not working with Avergoon, did not agree to borrow money from the investors, and never signed the loan agreements Avergoon presented to his investor clients. Avergoon forged the loan documents—and the signatures on deeds of trust. He then simply diverted the investors’ money to his own use.
U.S. Attorney Robert Brewer praised the FBI and IRS for their important work bringing Avergoon to justice. “Criminals can run, but we will work with our law enforcement partners around the globe to make sure they are brought to justice. We are committed to protecting the public from con artists and identifying thieves who undermine our trust and financial well-being.”
“Through lies and manipulation, Avergoon devised an egregious scheme in order to steal from investors; a classic case of greed overcoming honest business practices,” said FBI Special Agent In Charge Scott Brunner. “Today’s extradition shows that criminals who commit crimes and run will be subject to the long arm of American justice.”
“Mr. Avergoon allegedly victimized unwitting investors out of millions by falsely promising to purchase income-generating residential and business rental properties,” said Ryan Korner, Special Agent in Charge of IRS Criminal Investigation. “Mr. Avergoon used an elaborate system of fraudulent trust deeds, forged signatures, fake IRS documents, and shell companies to orchestrate his scheme. Perpetrators like Mr. Avergoon work to destroy the public’s trust in real estate professionals and the safety of investing in our housing markets. The agents of IRS Criminal Investigation will work tirelessly with our law enforcement partners to pursue these criminals and hold them accountable wherever they run or hide.”
The U.S. Attorney’s Office wishes to thank the Office of International Affairs of the Justice Department’s Criminal Division and our Latvian law enforcement partners, including the State Police of Latvia, for their extraordinary work in securing Avergoon’s return to the United States to face charges.
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
DEFENDANTS Case Number 19CR02955-BAS
Alexander Avergoon Age: 43 San Diego, CA
SUMMARY OF CHARGES
Wire Fraud, in violation of 18 U.S.C. § 1343
Maximum penalty: Twenty years in prison per count, $250,000 fine
Aggravated Identity Theft, in violation of 18 U.S.C. § 1028A
Maximum Penalty: Mandatory term of imprisonment of two years, to be served consecutive to the sentence imposed for any underlying charge; fine of up to $250,000
Money Laundering, in violation of 18 U.S.C. § 1956(a)(1)(B)
Maximum penalty: Twenty years in prison per count, $500,000 fine
Money Laundering in Amounts Over $10,000, in violation of 18 U.S.C. § 1957
Maximum penalty: Ten years in prison per count, $250,000 fine
Federal Bureau of Investigation
Internal Revenue Service
Assistant U. S. Attorneys Emily Allen (619) 546-9738, Oleksandra Johnson (619) 546-9769, and Andrew Young (619) 546-7981