Sunday, April 22, 2007

Sacramento Bee article discusses Mr. Foshie's fraud

The Sacramento reported the following story:


Fraud suspect pleaded poverty
Con man accused of money schemes after his bankruptcy filing.

Randall Bert Foshie claimed in his personal bankruptcy petition to be so broke that the file was recently closed as a "no asset case."

He listed debts totaling $30,664 and income of only $636 a month in federal disability benefits.
At the same time, he was busy convincing potential borrowers that he had millions to loan, and he collected at least $240,000 in "up-front" money from them without ever funding the loans, according to a criminal complaint filed Wednesday in Sacramento federal court.

Foshie, 57, was arrested Thursday by the FBI at his Roseville residence.

He made an initial appearance before U.S. Magistrate Judge Dale A. Drozd. The judge advised him of his rights and explained the fraud charges in the complaint.

At the request of Assistant U.S. Attorney Matt Stegman, the judge ordered Foshie held without bail pending a preliminary hearing May 11.

Here is the trail left by the convicted con man as it is traced in an affidavit in support of Foshie's arrest signed by FBI Special Agent Kristy S. Martinez:

Foshie's alleged web of deceit began to unravel in August when Ed Fralick mentioned him to Nevada County Sheriff Keith Royal, who passed Fralick's suspicions along to the FBI.
Fralick had his Auburn home for sale for $4.2 million and Foshie offered $4.8 million for the house, its art and furniture, saying he would use the place as a retreat for his company.

Foshie later said he wanted to buy residential lots bordering a golf course owned by Fralick and the course's clubhouse.

None of the purchases was ever made.

Foshie told Fralick that he had recently sold a number of radio stations in Southern California and had to roll the proceeds over into real estate investments by the end of 2006 to shelter the money from taxation, the FBI affidavit states.

Claiming to be an ex-cop and a lawyer, Foshie told Fralick that he was negotiating the purchase of a firm called Nevcar that is doing research and development of electric cars. He said he would buy the company's intellectual property rights and 704 acres in Oregon, on which he would build a plant to manufacture the cars.

When Fralick -- by this time working with the FBI -- visited Foshie in February in the Roseville office of Foshie's company, Monument Investment and Development Inc., Foshie said he was selling electric car dealerships to investors.

Each investor was required to pay $25,000 up front, Foshie would build the dealership, then the investor would pay him another $225,000 to acquire the dealership, Foshie explained.
On March 16, Foshie's troubles multiplied when mortgage broker Doug Braun went to the FBI about him. Through Braun, Special Agent Martinez made contact with the officers of a Carmichael business called Vision Lending Group.

Members of Vision Lending, who were looking for a $598 million loan to build a high-end community in Florida, had been tipped by Braun that Foshie claimed to have $1.6 billion he had to roll over into real estate by March 15.

Braun and some members of Vision Lending met with a Foshie employee, who told them Foshie traveled in elite business circles and was acquainted with investment wizard Warren Buffett.
At one point, Foshie told the group his family made a fortune by inventing the metal eye rings that go in tarps, the affidavit states.

Vision Lending paid Foshie a $50,000 "commitment fee," ostensibly to get a five-year loan at one percentage point above the prime lending rate with flexible repayment terms.
Foshie's employee was to fly to Florida to meet with the developer within a week as part of Monument Investment's "due diligence" -- a business term meaning a qualitative assessment of a potential affiliate's character and capability.

After the trip was twice postponed, Braun hired a private investigator to look into Foshie. Through this investigation, Braun and his associates learned that the man who purported to have more than $1.5 billion had petitioned for bankruptcy protection in mid-2006, his only income was Social Security disability and he had a criminal record.

Foshie served a prison term in the 1990s after pleading guilty in Sacramento federal court to mail fraud. The case stemmed from a scam in which Foshie told potential buyers he could get them a great deal on a car that was part of a corporate fleet.

They had to give him the money up front and he promised to deliver the cars, but he took the cash and never furnished the cars.

He picked the pockets of the buyers for $442,348.

When members of Vision Lending confronted him, Foshie claimed the person with the criminal record was Randall Bert Foshie and he is Randall Burt Foshie.

He said he had to file for bankruptcy protection because his ex-wife ruined his credit.

But the Vision Lending members demanded a refund, and Foshie wrote them a check for $50,000, which promptly bounced.

The FBI executed a search warrant on Foshie's Roseville office March 20, seizing documents and records that led agents to a long line of people who, on the promise of large loans, gave Foshie money, with which he was to perform "due diligence."

None of the money has been recovered.

Typical of these deals is the one with Brian McCarthy, who told Martinez that Foshie offered him a multimillion-dollar loan, but said he needed $20,000 as a "commitment fee."

McCarthy wrote Foshie a check for $20,000, but the loan was never funded.

During this process, Foshie told McCarthy he was a lawyer and used to be counsel of the Walt Disney Co. before he got involved in real estate investments and building large residential subdivisions.

Randy's blog starts today, April 22, 2007......