Plan for daughter’s legacy left mom duped, lender convicted
The scheme duped people looking to start small businesses and real-estate ventures across North America.
Ingrid Robinson said she died Nov. 16, 1998, the day her only child overdosed on heroin in a Manhattan apartment. So nine years later, the single mother said, she had nothing left to lose when a lender cheated her out of $10,000 saved to create a legacy for her late daughter, Michelle.
Since then, she has doggedly pursued the company that deprived her of that dream, emptying her bank account and courting foreclosure.
In March, Robinson finally got what she called “Justice for Michelle.” Andrew Bogdanoff, 67, the founder of Scottsdale, Ariz.-based Remington Financial Group, was sentenced to 18 years in prison for orchestrating an advance-fee scheme that defrauded 1,900 people out of more than $26 million.
The Remington scheme is one that prosecutors had heard of before: A lender advertises loans in newspapers and through brokers, potential clients are asked to provide thousands of dollars for due diligence, and then the lender disappears after getting the deposits.
Remington claimed that it had arranged more than $5 billion in financing for commercial properties and had offices in Phoenix, Boston, New York and Los Angeles.
“Once you’ve lost everything in your life that has any meaning, you don’t care,” Robinson said about federal legislation she is seeking to deter similar scams. “I was a mother on a mission. There was nothing they could do to me because I was already dead.”
Bogdanoff is housed at the federal detention center in Philadelphia. William Cannon, his court-appointed attorney, didn’t respond to messages seeking comment on the case.
Four others also pleaded guilty and a sixth was convicted in the scheme, which duped people looking to start small businesses and real-estate ventures across North America.
Bogdanoff’s 26-year-old son, Aaron, was sentenced May 2 in Philadelphia federal court to two years of probation and ordered to pay $142,000 on a related tax-fraud charge, U.S. prosecutors said.
What made Remington unusual was that the fraud continued for so long, said Assistant U.S. Attorney David Axelrod, who prosecuted the Remington executives. The almost 20-year-old company had been operating without triggering suspicion, Axelrod said.
The type and number of people involved made the case stand out, too, he said.
“They were very careful with their documents making sure to have a lot of legalese,” he said. “They made sure they didn’t say there was a guarantee, so once a victim didn’t receive funding it wasn’t easy to prove that victim was defrauded.”
For every Remington, there are thousands more companies just like it operating on the fringes of small business, said Dan Kristie, a retired FBI agent who worked with Robinson to make a case for prosecutors.
In his 20 years with the FBI, Kristie said there were several investigations of advance-fee schemes similar to Remington. He can’t recall another prosecution.
“The evidence was always lacking to support a criminal conviction,” Kristie said.
That’s where Robinson came in. Over the course of several years, she painstakingly documented wrongdoing by Remington, enlisting the help of Kristie and others to track the company’s alleged investments and identify other victims.
In March 2008, she compiled a 92-page document titled “Stop Remington Financial Group Coalition” detailing questionable practices of Remington and BlueStone Real Estate Capital Group, an investment firm Remington started in March 2007. Neither company still exists.
Bogdanoff and others were charged in a 2012 indictment with wrongdoing over a period of six years. From 2005 to 2011, Remington duped people into paying fees by issuing fake letters of interest stating it had a lender or vendor seeking to finance their projects, prosecutors said.
Remington charged fees in two stages: as much as $10,000 for initial document collection and business plan analysis, and $15,000 for additional analysis, including on-site inspection of potential projects.
Once the advance fees were paid, the company would cite problems with the project when financing didn’t materialize, prosecutors said.
After her daughter died at 28, Robinson said she fell into a depression that led to a stint at a mental-health facility.
Afterward, she sought to gather funds to honor Michelle’s memory, refinancing her home near San Francisco, and in 2006 buying an acre of land north in Clearlake, Calif., for $550,000.
She planned to call it “Michelle’s Diamond” and build town homes and retail shops on the property.
She said she was introduced to Remington through Vantage Real Estate Solutions in Tustin, Calif. Vantage hasn’t been accused of any wrongdoing.
“My original request was just for a bridge loan of $100,000 but they loved the project so much, they wanted to fund the whole deal of $5 million,” Robinson said of Remington.
She said she wired $10,000 to Remington through Vantage, which took a 30 percent cut.
Vantage officials didn’t return a call seeking comment on Robinson.
Months later, with no funds in hand, Robinson contacted Bogdanoff. He referred her to Matthew McManus, his counterpart in Philadelphia, after telling her that he could “no longer waste his time speaking to me because he was running a billion-dollar company,” Robinson recalled.
McManus was convicted in February for his role in the scheme. No sentencing date has been set. He faces at least 15 years in prison, prosecutors said.
By the time she was sent to McManus, Robinson had begun researching Remington and had found a handful of victims. One, Gene Teigland, helped her put together a list of “failed” Remington deals.
Teigland, a former film producer from Minneapolis, alleged that he paid Remington $7,895 as an advance payment for a $20 million loan for five movies plus distribution. Teigland had been through a similar process before landing an investor for his film “Arnolds Park,” a thriller released in about 20 U.S. theaters in 2007.
Remington “had a lot of proof” that made it seem credible, Teigland said. The company was backed by Republic Bank in Philadelphia and a commercial broker who steered business to Remington was a director for the Better Business Bureau in New Jersey, Teigland said.
Meg Kane, an outside spokeswoman for Republic’s parent company, Republic First Bancorp, declined to comment on the company’s relationship with Remington.