Here are the details from the U.S. Attorney’s Office:
LIBERTYVILLE MAN SENTENCED TO FIVE YEARS IN PRISON FOR CHEATING
SOME 100 VICTIMS OF MORE THAN $9 MILLION IN “PONZI” SCHEME
CHICAGO — A Libertyville man was sentenced today to five years in federal prison for defrauding approximately 100 victims of more than $9 million in a “Ponzi-type” fraud scheme.
The defendant, Forrest David Laidley, owned and operated Forrest Properties, Inc., which engaged in real estate development in the northern suburbs.
Laidley obtained well in excess of $10 million from investors and financial institutions by offering and selling limited partnership interests in a commercial development and short-term, high-interest, guaranteed promissory notes to the public.
Laidley, 66, was sentenced by U.S. District Judge Blanche Manning, who said she will also impose restitution in an amount to be determined at future court proceedings. Judge Manning ordered Laidley to begin serving his sentence on Jan. 14, 2011.
Laidley pleaded guilty in February to one count of bank fraud and one count of mail fraud affecting a financial institution after he was indicted in July 2009. The sentence was announced by Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois, and Robert D. Grant, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The Lake County State’s Attorney’s Office also assisted in the investigation.
The court record showed that Laidley, through Forrest Properties, fraudulently obtained funds from investors and financial institutions by misrepresenting
- the expected return on investments,
- the risks associated with investments,
- his ownership of property,
- his ownership of loan collateral,
- his financial condition,
- the status of investments and
- the use of the funds he obtained.
Laidley commingled the fraudulently obtained funds and at times misappropriated them to make Ponzi-type payments to investors, to repay delinquent loans including bank loans, to benefit unrelated real estate development projects and to benefit himself.
The government presented evidence at sentencing that victims were defrauded of a total of approximately $9 million.
Of that amount, about $7 million was lost by investors in the promissory notes, while approximately 40 investors in a shopping center development were defrauded of about $2 million when Laidley sold their limited partnership assets without their knowledge.
The prosecution was conducted under the auspices of the Financial Fraud Enforcement Task Force, which includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit: www.StopFraud.gov.
The government is being represented by Assistant United States Attorneys Edward G. Kohler and Shoshana Gillers.