LOS ANGELES (CNS) — The ex-president and CEO of a now-defunct Sherman Oaks-based brokerage and investment firm was sentenced Monday, Oct. 3, to 15 years in federal prison for a real estate investment scam that caused about five dozen investors to lose nearly $4 million.
David Williams, a onetime licensed securities dealer and investment adviser, pleaded guilty in May 2015 to three counts of wire fraud and two counts of tax evasion in the midst of his jury trial in Los Angeles federal court.
Williams, 55, of Studio City, admitted that he directed Morgan Peabody representatives to sell securities in a fund that he personally had created, purportedly to invest in real estate.
Investors were told that the Sherwood Secured Investment Fund LLC, a Studio City business that Williams owned, would bring them a 9 percent annual return, according to the U.S. Attorney’s Office.
However, as he admitted in the plea agreement, Williams used the majority of investor money from the Sherwood Fund to pay for personal expenses, including a lease on a $6 million residence in Toluca Lake.
Between June 2007 and April 2008, Williams fraudulently obtained more than $3.75 million from about 60 investors as a result of the Sherwood Fund offering, according to federal prosecutors.
Williams also admitted that he committed tax evasion by failing to file returns with the Internal Revenue Service for tax years 2007 and 2008, and failing to report the more than $2.3 million in income he received.
As part of his plea agreement, the defendant agreed to pay additional taxes of nearly $778,000 for those tax years, as well as the civil fraud penalty and interest.
A co-defendant, Jonathan Greenfield, 51, of West Hills, was sentenced last year to 18 months in prison for his part in the scheme.
Greenfield, who was a licensed securities representative at Morgan Peabody, was also ordered to pay restitution of about $360,000 to victims of the fraud, according to the U.S. Attorney’s Office.
He pleaded guilty in December 2013 to two wire fraud counts, admitting that he provided his clients with materially false information related to the fund.