Sham Business Owners Indicted for Arizona Real Estate Investor Scam

This week, two men were indicted in federal defrauding charges for their part in a $6.5 million Arizona real-estate development investment scam. Stanley Paulic, 41, and Steven Long, 45, were charged with wire fraud, as well as conspiracy to commit wire fraud and mail fraud.

Long and Paulic co-founded a business known as Integrity Financial AZ, LLC. While a seemingly legitimate business on the front, in reality, the two were continually scheming ways to line their bank accounts through misrepresentation and scams, according to the recent indictment. People thought they were investing their money in a legitimate organization — instead, Long and Paulic were pocketing the cash for themselves.

Long and Paulic continually assured investors that the funds were going toward developing real estate in Tonapah, Arizona. Long and Paulic, though, never registered their company or themselves with the U.S. Securities and Exchange Commission — a required step for anyone participating in the securities industry.

The sham involved convincing investors that they would own land in Arizona, which would be rented out to individuals who couldn’t qualify for traditional mortgages. After improving their credit scores, the renters could then be sold the homes, at a price highly profitable to Integrity Financial AZ. Investors were promised return rates of between 10% and 20%, with the returns paid out on a monthly basis.

For the most part though, the monthly payments that did go out were collected, in part, from other investor funds, and the duo used investment funds to pay for non-business related expenses. Over the course of a year, Paulic transferred over $500,000 from the company to cover his personal expenses.

“These individuals ripped off dozens of people, stealing life savings and creating real financial hardships,” said U.S. Attorney Steven Dettelbach in a press interview about the case.

Over 60 people were scammed in the group’s fraudulent investment scheme, for a total of $8.1 million. So far, a little under $2 million has been returned to the group. Investigations have been ongoing by the FBI.

Leave a Reply

Your email address will not be published. Required fields are marked *