LOS ANGELES
A federal judge on Monday sentenced a former registered representative at a now-defunct Sherman Oaks brokerage and investment firm to 18 months in federal prison on wire fraud charges associated with a real estate investment scam that resulted in about five dozen investors losing nearly $4 million, officials said.
U.S. District Judge Dale S. Fischer sentenced Jonathan Greenfield, 50, of West Hills, who was a licensed securities representative at Morgan Peabody, Inc.
Greenfield plead in December 2013 to two wire fraud counts, admitting that he provided his clients at Morgan Peabody with materially false information related to a real estate investment fund called the Sherwood Secured Investment Fund, LLC. Greenfield also admitted the he omitted material information in connection with the fund.
The fund was created by former Morgan Peabody Chief Executive Officer David Williams, who pleaded guilty in May and is pending sentencing.
The Sherwood Secured Investment Fund offered a 9 percent annual return on investments made in “direct and indirect investments in real estate and real estate companies” and other secured investments, but Williams admitted that he used the majority of investor money from the Sherwood Fund to pay for personal expenses.
Greenfield was not charged with knowing that the 54-year-old Williams would misappropriate the fund monies, but was charged with misrepresenting to his clients the risk and the purpose of the investment.
In addition to the prison term, Greenfield was ordered to pay restitution of $359,497 to victims of the fraud.
Between June 2007 and April 2008, Williams fraudulently obtained more than $3.75 million from approximately 60 investors as a result of the Sherwood Fund offering.
In a plea agreement,Williams admitted that he did the following things:
- He directed Morgan Peabody representatives to sell securities in a fund that Williams personally had created to invest in real estate, according to authorities.
- The Sherwood Secured Investment Fund, LLC, a Studio City business that Williams owned, offered a 9 percent annual return on investments.
- 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.
- Williams also admitted that he failed to file returns with the IRS for tax years 2007 and 2008, and failed to report more than $2.3 million in income he received.
- Williams has agreed to pay additional taxes of $777,881 for those tax years, as well as the penalties and interest.