Alexander Avergoon, Conspirator in Chabad of Poway Fraud Case Sentenced to Prison
A former San Diego real estate agent was sentenced Monday to
more than five years in prison for orchestrating a fraud scheme that bilked
investors out of millions of dollars.
Alexander Avergoon, who was also ordered to pay nearly $10
million in restitution, pleaded guilty to federal charges in connection with
what prosecutors described as a series of investment fraud schemes spanning
nearly a decade.
According to the U.S. Attorney’s Office, Avergoon, 46,
persuaded more than a dozen investors to partner with him to buy real estate
properties such as apartment buildings and split the income from renting out
the properties.
However, prosecutors said he didn’t use the investor funds
to buy properties, and forged documents in order to make the investments appear
legitimate.
The U.S. Attorney’s Office also said Avergoon purported to
use investor money to fund short-term, low-risk loans and created fake loan
agreements and other doctored documents.
Using investor funds, Avergoon made regular monthly payments
to the victims, which were supposedly rent payments from tenants at the
nonexistent properties or payments that supposedly proved that the short-term
loans were performing, prosecutors alleged.
In the defense’s sentencing papers, Avergoon and his
attorney said the former realtor engaged in the crimes out of desperation, as a
way to offset the dire financial straits of his multiple failing businesses.
In a handwritten letter to the judge, Avergoon wrote that in
order to support his businesses and avoid laying off employees, “I made the
biggest mistake of my life.”
Avergoon wrote that he did not use investor funds as a way
to support an extravagant lifestyle, and said “My actions are not excusable,
regardless of the reasons behind it.”
Avergoon was arrested in Latvia in 2019 and extradited to
the United States.
Prosecutors allege Avergoon fled the country after FBI
agents met with him in late 2018, a meeting that alerted him to the criminal investigation
into the fraud.
Avergoon’s attorney, Adam Doyle, wrote in sentencing papers
that Avergoon traveled out of the country to see his parents in Israel and
always intended to return to San Diego.
When he discovered his parents were leaving Israel to go on
vacation, he flew to Latvia instead, near where a friend of his was living,
according to the attorney, who wrote that his client was unaware that he had
been indicted.
U.S. Attorney Randy Grossman said in a statement, “This
defendant is a prolific fraudster who has stolen millions of dollars from the
many victims of his devious schemes. It’s now his turn to pay the price for his
crimes.”
Though Avergoon’s 64-month sentence pertains largely to the
real estate scheme, federal prosecutors have also alleged that Avergoon
assisted former Chabad of Poway Rabbi Yisroel Goldstein in fraudulently
obtaining nearly $1 million in emergency grant funds.
The U.S. Attorney’s Office said Avergoon also helped
Goldstein recruit people to take part in a fraudulent donation fraud tax
evasion scheme, in which people made fake donations to the Chabad and had the
majority of the money funneled back to them.
Goldstein, who pleaded guilty to tax and wire fraud charges
stemming from a string of fraud schemes, is slated to be sentenced Tuesday in
San Diego federal court.
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