Karen Elaine Hanover, Who Vehemently Denied Pulling a $1.5 mil Fraud, Now Admits Guilt

*Corrected from earlier version to reflect Karen Hanover did sign–and initialed each page of–the plea agreement.

For someone who denied, denied, denied she committed fraud and freely threw out accusations of (and an entire blog dedicated to) prosecutorial misconduct and accused yours truly of being a big, fat meanie, that Karen Hanover sure did end up admitting to a whole bunch of guilt.

The 48-year-old Seal Beach resident signed–and initialed each page of–a plea agreement Tuesday that was filed in the federal court in Santa Ana Wednesday. It states that Hanover now admits to bilking 48 people out of $1,437,091.36.


Karen Elaine Hanover Goes From Federal Court as Fraud Defendant to Comedy Club as Stand-up

Hanover, who at last word claimed to be a stand-up comic and on-the-verge TV talk show host, used to run get-rich-through-real estate seminars around the country–until investor complaints led to a federal investigation and two separate cases in the Ronald Reagan Federal Courthouse.

As Hanover was being investigated, she contacted some of those who complained about her through “spoofing” software that made it sound and appear on caller I.D. that the FBI was on the phone with warnings to back off. She got six months in jail for that.

After that, Hanover stuck to her denials, denials, denials of fraud, some of which she posted on a blog she dedicated to shaming her critics and accusing former lead prosecutor Andrew Stolper, who left the U.S. Attorney's office early in 2013 to start a litigation-finance firm, of prosecutorial misconduct.

But this is what Hanover and her attorney John Barton just signed: That she, in or around 2010 or 2011, hatched a scheme to defraud investors she found through her seminars on getting rich through commercial real estate.

The plea deal says she pitched her “Fast Track” program that investors could enter for $19,000 (later kicked up to $29,000) and made a series of false statements to rope people in, including guaranteeing returns of more than 100 percent and full refunds if they did not have investment property within a year.

At the time she made those statements, she knew they were false, reads the plea deal, which adds Hanover also knew she gave false promises to be an equity partner in real estate transactions without having any capital of her own to invest.

Hanover admits that on or about March 3, 2010, a victim wired a $20,000 payment for the “Fast Track” program from his bank account in Vineland, New Jersey, to Hanover's “commercial education account” at a Wells Fargo branch in Long Beach.

“As a result of defendant's fraudulent scheme, about 48 victims lost $1,437,091.36,” states the plea agreement.

In exchange for her guilty plea, the government's prosecution team, now headed by Assistant U.S. Attorney Joseph McNally, agrees not to fight Hanover receiving the low end of sentencing guidelines, even though guilt made her subject to the high end terms that could have had her locked up for several years.

Prosecutors say if Hanover lives up to the terms of the plea deal, which includes not appealing anything covered in it, they will not challenge a sentence of at least 20 months in custody and restitution of at least $1.5 million.

The plea deal indicates the judge can deduct her previous jail time from whatever term she ultimately gets.

Email: mc****@oc******.com. Twitter: @MatthewTCoker. Follow OC Weekly on Twitter @ocweekly or on Facebook!

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