• Subscribe to the AG's RSS Feed
  • Join the AG's FaceBook
  • Follow the AG on Twitter
  • View the AG's YouTube Channel
  • View the AG's Tumblr Page

Brown Sends Mastermind of $20 Million Real Estate Scheme to Prison

Thursday, May 7, 2009
Contact: (415) 703-5837

NEVADA COUNTY -Attorney General Edmund G. Brown Jr. announced that the man behind an “elaborate real estate scam,' Thomas Hastert, pled guilty today to 59 felony counts of embezzlement, securities fraud, and selling unregistered securities.

“For three years, Hastert pulled off an elaborate real-estate scam, squeezing millions out of investors,” Brown said. “Hastert’s days of swindling are at an end, and he will spend the next 5 years in prison.”

Brown filed criminal charges against Hastert in the Nevada County Superior Court in February 2009 for embezzlement, securities fraud, selling unregistered securities, and filing false documents.

Hastert brokered over 270 hard-money loans in Nevada, Sacramento, Sutter, Butte, Placer, and Yolo Counties between September 2004 and September 2007 for real estate development projects. Hard-money loans typically provide high returns for private investors and are secured through collateral such as real estate.

Hastert secured $20 million from several investors, using the funds to broker hard-money loans to borrowers seeking to develop homes on real estate.

In the criminal complaint, Hastert is alleged to have:

- Misled investors. Hastert told investors that borrowers had excellent credit scores and were capable of repaying the loans. This proved to be untrue. Many borrowers had poor credit scores, did not make regular payments on the loans, and held properties that were in foreclosure.

- The loans that Hastert brokered were required by law to be placed into a special trust account overseen by a third-party escrow firm to ensure the project was being built. Hastert never did. Hastert used the money to pay his office expenses and other development projects. There was no oversight.

- Hastert told investors he would personally oversee the development of the land. In one instance, he was asked by investors to drive them to a particular property that was supposedly under development. Hastert could not locate the property.

- Set up fake investors, known as 'straw men,' to keep concerned investors at bay. Hastert filed documents with a county recorder's office saying that his secretary owned a majority interest in the investment, despite the fact that she had never invested a single dollar. If a legitimate investor tried to initiate foreclosure proceedings, Hastert would contend that the supposed majority owner opposed the action.

- Embezzled fees. Hastert was entitled to collect a 3% fee on loans he brokered. However, he took all his fees up-front as if the loan were fully funded. In fact, some loans never fully funded, and others took more than a year to fully fund.

Hastert will be formally sentenced on June 25 in Nevada County Superior Court. He is expected to receive 5 years in prison.

# # #

Search News Releases

Subscriptions

Megan's Law

California Registered Sex Offender Database

Search Now

Megan's Law information is also available in these languages:

Site Navigation

Translate Website

  • Google™ Translation Disclaimer

This Google™ translation feature is provided for informational purposes only.

The Office of the Attorney General is unable to guarantee the accuracy of this translation and is therefore not liable for any inaccurate information resulting from the translation application tool.

Please consult with a translator for accuracy if you are relying on the translation or are using this site for official business.

If you have any questions please contact:Bilingual Services Program at (916) 324-5482

A copy of this disclaimer can also be found on our Disclaimer page.

Select a Language Below / Seleccione el Idioma Abajo

Close this box or use the [ X ]