Wednesday, February 19, 2014

Guilty Plea in Golf Course Scheme that Swindled Millions from Investors

A man who fraudulently convinced 11 persons to loan him a total of $3.6 million for the purchase of a golf course near Gardnerville, Nevada, pleaded guilty to 24 federal felony charges, announced Daniel G. Bogden, United States Attorney for the District of Nevada.

Scott H. Summerhays, 55, formerly of the South Lake Tahoe area, but currently in custody in Reno, pleaded guilty during the first day of trial to 14 counts of wire fraud, seven counts of money laundering, two counts of identity theft, and one count of aggravated identity theft. Guilty Plea in Golf Course Scheme that Swindled Millions from InvestorsSummerhays, who was indicted in February 2012, faces over 30 years in prison and fines of up to $5.7 million and is scheduled to be sentenced on May 29, 2014, at 10:00 a.m. by U.S. District Judge Larry R. Hicks.

“This is the second person to be convicted or sentenced of federal investment fraud charges in the northern Nevada area this week,” said U.S. Attorney Bogden. “In both cases, the defendants led their victims to believe that they were legitimate businessmen and used fraudulent documents to support their scheme. If you are considering a financial arrangement with someone, be sure to check the veracity of any documents they provide you, as fraudulent documents are common and easy to create.”

According to the court records, during 2008 to 2010, Summerhays represented to potential investors that he was purchasing the Genoa Lakes Golf Club located west of Gardnerville, Nevada, for $17 million and needed a short-term loan to complete the deal because his own money was tied up in a trust. Summerhays also represented to the potential investors that he solicited funds for oil and gas investments in Texas and owned more than $30 million in Berkshire, Las Vegas Sands, and MGM stocks. Summerhays showed some of the investors a fraudulent investment account statement. Summerhays also claimed that he was in partnership with Las Vegas Sands owner Sheldon Aldelson and showed potential investors a partnership agreement containing the forged signature of Adelson. In reality, Summerhays had no investment portfolio, and Adelson never heard of Summerhays or had any partnerships with him. Using this scheme, Summerhays was able to convince 11 persons to loan him money for the golf course, totaling approximately $3.6 million. None of the investors were repaid, and they lost all of the money they loaned Summerhays.

The case was investigated by the FBI and IRS-Criminal Investigation and prosecuted by Assistant U.S. Attorneys Ronald C. Rachow and Megan Rachow.

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