San Francisco, California - Michael James Frew pleaded guilty Tuesday to wire fraud, mail fraud, and money laundering charges in connection with a fraudulent real estate investment scheme, announced United States Attorney David L. Anderson, Federal Bureau of Investigation Special Agent in Charge John F. Bennett, and Special Agent in Charge of the Internal Revenue Service, Criminal Investigation (IRS-CI), Kareem Carter. The guilty plea was accepted by the Honorable Vince Chhabria, U.S. District Judge.
According to the plea agreement, Frew, 70, formerly of Hillsborough, Calif., admitted that starting no later than 2010 and continuing through March of 2014, he solicited investments from numerous individuals on the false premise that he would invest their money in real estate. Frew sometimes claimed the real estate was in foreign countries and usually explained that the areas in which he would invest recently had been struck by a natural disaster. In truth, Frew did not invest his victims’ money in real estate. Instead, he used the money to speculate in the stock market, to make expenditures for personal expenses, and to repay other victim “investors.” Frew admitted that on several occasions he paid some of the money back to investors to make it seem like their investments were legitimate, which lulled his victims into a false sense of security that their money was properly invested. He further admitted he caused losses to his victims of up to $3.5 million.
A federal grand jury indicted Frew on July 26, 2018, charging him with two counts each of wire fraud, in violation of 18 U.S.C. § 1343; mail fraud, in violation of 18 U.S.C. § 1341; and money laundering, in violation of 18 U.S.C. § 1957. Frew pleaded guilty to all the charges except one count of mail fraud, which will be dismissed at sentencing if Frew complies with the terms of the plea agreement.
Judge Chhabria scheduled Frew’s sentencing hearing for July 17, 2019, at 10:30 a.m. The defendant faces a maximum sentence of 20 years’ imprisonment for the mail fraud count and for each count of the wire fraud counts. Frew faces a maximum sentence of 10 years’ imprisonment on each count of money laundering. In addition, Frew faces fines of $250,000 on each count in the indictment and restitution for the losses he is alleged to have caused. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorney Robert David Rees is prosecuting the case with assistance from Bridget Kilkenny. The prosecution is the result of an investigation by the Federal Bureau of Investigation and the IRS-CI.