A 57-year-old man was sentenced to a year in jail Friday for his part in a $52 million real estate scam that had fraudsters falsely claiming golf legend Arnold Palmer was a partner on the way to wiping out the life savings of some retiree investors.
As part of a plea deal, Mark Sostak in November copped to two felony counts of making a false statement or omission in connection with a purchase or sale. In exchange, multiple other felony counts were dismissed.
He had been among those who worked for Irvine-based Carolina Development and sold $52 million worth of stock they said would be used to buy land and develop luxury resorts as part of the partnership they claimed included Arnie.
Some land was acquired, but according to Assistant Attorney General Michael Whitaker, Palmer was not really part of the operation, the property was left undeveloped and the sales force spent about $24 million on themselves.
More than 1,000 investor were stung as part of the $52 million scheme, with some of them being senior citizens who invested their retirement funds, said Whitaker, who added that in classic Ponzi scam style, suspicious investors were paid some returns on their investments with money collected from newer rubes.
Five others have pleaded guilty and been sentenced or are awaiting their fates. Robert Waldman, 54, just finished six months of home confinement last Tuesday after having copped to knowingly selling an unregistered security. As with Sostak, several other felony counts were dropped.
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Soren Svendsen, 50, pleaded no contest in January to unlawful sale of unqualified securities and is scheduled to be sentenced next Jan. 15.
Lambert Vandertuig, 57, pleaded guilty Nov. 20 to more than 80 felonies, acknowledged multiple sentencing enhancements for fraud and was sentenced to 20 years in prison, although Orange County Superior Court Judge Thomas Goethals did give the crook credit for 1,342 days behind bars.
Jonathan Carman, 52, and Scott Yard, 54, pleaded guilty in December to multiple felonies, including grand theft and making an untrue statement related to a purchase or sale. Carman is expected to get 12 years in prison on Sept. 18, while Yard will likely draw half that term on Sept. 8, according to Whitaker.