May 24, 2013
According to a federal Indictment in the Southern District of Texas returned one May 8, 2013 and unsealed on May 23, 2013, Samuel Ray Palasota, 52, Houston, TX , engaged in some 21 counts of mail fraud and 3 counts of wire fraud involving a real estate investment scheme.
NOTE: An Indictment contains allegations and a defendant is presumed innocent unless and until convicted beyond a reasonable doubt in a court of law.
Not that real estate fraud is much of a shocker in these post-Great Recession days. Why it seems like only yesterday that we were all flippin' homes and talking about Alt-A mortgages and CMOs. Then the housing market stalled, crashed, and burned; and took most of the economy along with it. Then we discovered and uncovered all the fraud that had fueled that ascent and descent.
Still, jaded as we've all become, Defendant Palasota sort of stretches things to an even testier limit. According to federal prosecutors, from sometime around December 2008 through December 2009, Palasota held himself out as a pastor and also claimed to manage a real estate investment program. The name under which this real estate program operated was "The Maker's Resources."
At some point a Mississippi woman came to Palasota for spiritual guidance and emotional support following her 2007 divorce; however distraught this divorcee may have been, the fact is that she had received about $1 million as a divorce settlement. Apparently, Palasota learned about those funds and persuaded the woman to invest in "The Maker's Resources," which he presented as a program that purchased foreclosed homes in the Houston area at below-market prices and would later re-sell them for a profit.
Pastor allegedly claimed his real estate investment was "guaranteed" to provide a high rate of return. In fact, he gave the divorcee an investment schedule setting forth how the minimum rate of return would increase by 5% for every additional $100,000 she invested, up to a maximum of $650,000. Wouldn't you just know it but that she put up $650,000.
Federal prosecutors allege that the funds never quite managed to find their way into "The Maker's Resources" project pipeline but, rather, were diverted to pay for Palasota's personal expenses and towards the purchase of automobiles. Although it appears that Palasota did make payments to the divorcee under the guise of "returns on investment," the Indictment characterizes those payments as emanating from the $650,000 investment. In essence stealing from Peter to pay Peter.
If convicted, Palasota faces a possible 20 years in prison and a maximum $250,000 fine for each of the 21 counts of mail fraud and the three counts of wire fraud. The indictment also includes a notice of forfeiture in the amount of $650,000.
Bill Singer's Comment
Below, find a sample of my recent online commentaries about affinity fraud. Use the painful lessons learned by many fleeced investors to protect your savings. Pass these articles on to those you know who have been approached by purported members of their community with promises of overblown returns.