No restitution asked in Ponderosa land fraud case
Twenty-one people said they lost tens of thousands of dollars in bad investments with the now-defunct Ponderosa Home Loans, but none of them came to court Friday to ask for restitution.
So, Nevada County Superior Court Judge John Darlington ordered no restitution be paid by 66-year-old Keith Hysom, who had pleaded guilty to five charges of fraud and identity theft.
It was not clear why most of the victims did not seek repayment.
However, the investor with the largest loss had decided not to ask for restitution because he would, instead, write off the loss on his income tax return, defense lawyer Stephen Munkelt told the court during sentencing April 5.
Deputy District Attorney Jim Phillips said Cindy Morgan of the Nevada County Victim-Witness program had assured him she had contacted each of the victims to invite them to the hearing, and she reported to him that “they felt it was pointless,” Phillips said.
Morgan could not be reached late Friday afternoon.
Hysom, a former loan broker, was sentenced to five years in state prison on April 5 for fraudulent land and construction loans.
The loans came to a total of $2.4 million, but Munkelt, of Nevada City, said the actual out-of-pocket losses to investors came to between $200,000 and $400,000.
Most of the victims were retired people looking for investments that were paying a better rate of return than the relatively low rates being offered by conventional investments.
Hysom had argued from the beginning that three contractors had made off with about $750,000 in funds he had collected from investors for legitimate land deals, starting him on a chain of events that led to the fraud.
Phillips said he has received no evidence that any contractors who worked with Hysom had diverted money.
“There may be a statute of limitations issue,” Phillips said. “But if someone brought us a clear-enough case to begin with, I’m not saying we’d refuse to look.”
Munkelt blamed state investigators for dropping the ball.
“The lack of effort shown by the Department of Justice in investigating this very substantial fraud is shocking,” Munkelt said.
To contact staff writer Trina Kleist, e-mail firstname.lastname@example.org or call 477-4231.
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