EUGENE, OR—Louis J. Borstelmann, 69, of Thousand Oaks, California, was sentenced by United States District Judge Michael R. Hogan to 108 months in prison for running a Ponzi scheme that he used to swindle more than 100 people out of more than $18 million. A majority of Borstelmann’s victims were elderly and retired individuals living in Florence, Oregon, although other victims lived in places as far away as Hawaii, Montana, and Texas. In addition to his prison sentence, Borstelmann must serve three years of supervised release and pay restitution in the amount of $18,989,334.
“Borstelmann wreaked havoc on his victims—mostly older folks—stealing their retirement funds, their homes, even the nest eggs they’d set aside for their grandkids’ education,” said U.S. Attorney Dwight C. Holton. “We can’t get all the money back, but at least we can achieve some measure of justice—and let other con-artists know that we will hold them accountable and send them to prison.”
On March 29, 2011, Borstelmann pled guilty to mail fraud and money laundering in connection with his Ponzi scheme. As part of the scheme, he admitted to soliciting individuals to invest in real estate through his company Sunburst Associates, Inc., a California corporation. Borstelmann falsely claimed to offer hard-money loans through his company that were secured by real estate deeds of trust. To entice potential investors, he falsely promised high rates of return and a security interest in the property allegedly pledged to secure the investment.
Borstelmann further admitted that the alleged investments never existed and that it was all a Ponzi scheme wherein he used new investor money to pay existing investor obligations, and spent investor money on personal items, including a car and a home. At sentencing, Borstelmann was ordered to pay more than $18 million in restitution and forfeited $100,000 and a Lexus SUV.
At the sentencing hearing, several of Borstelmann’s victims told Judge Hogan that they had lost everything due to Borstelmann’s scheme, including their lifesavings, their homes, educational savings for their children and grandchildren, and their ability to trust others.
Friday, July 22, 2011
Louis J. Borstelmann Sentenced to 108 Months in Prison for $18 Million Ponzi Scheme
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