A former San Diego real estate agent was sentenced Monday to more than five years in prison for orchestrating a fraud scheme that bilked investors out of millions of dollars.
Alexander Avergoon, who was also ordered to pay nearly $10 million in restitution, pleaded guilty to federal charges in connection with what prosecutors described as a nearly decade-long investment fraud scheme involving real estate.
According to the U.S. Attorney's Office, Avergoon convinced investors to partner with him to buy real estate properties such as apartment buildings and split the income from renting out the properties.
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However, prosecutors said he didn't use the investor funds to buy properties, and forged documents in order to make the investments appear legitimate. Avergoon made regular monthly payments to the victims, which were supposedly rent payments from tenants at the nonexistent properties, prosecutors alleged.
In the defense's sentencing papers, Avergoon and his attorney said the former realtor engaged in the crimes out of desperation, as a way to offset the dire financial straits of his multiple failing businesses.
In a handwritten letter to the judge, Avergoon wrote that in order to support his businesses and avoid laying off employees, "I made the biggest mistake of my life."
Avergoon wrote that he did not use investor funds as a way to support an extravagant lifestyle, and said "My actions are not excusable, regardless of the reasons behind it."
Avergoon was arrested in Latvia in 2019 and extradited to the United States.
Prosecutors allege Avergoon fled the country after FBI agents met with him in late 2018, a meeting that alerted him to the criminal investigation into the fraud.
But Avergoon's attorney, Adam Doyle, wrote in sentencing papers that Avergoon traveled out of the country to see his parents in Israel and always intended to return to San Diego. When he discovered his parents were leaving Israel to go on vacation, he flew to Latvia instead, near where a friend of his was living, according to the attorney, who wrote that his client was unaware that he had been indicted.
Though Avergoon's 64-month sentence pertains largely to the real estate scheme, federal prosecutors have also alleged that Avergoon assisted former Chabad of Poway Rabbi Yisroel Goldstein in fraudulently obtaining nearly $1 million in emergency grant funds.
Goldstein, who pleaded guilty to tax and wire fraud charges stemming from a string of fraud schemes, is slated to be sentenced Tuesday in San Diego federal court.
