Alexander Avergoon, $12 Million Real Estate Investment Scheme, California 2019

San Diego Real Estate Agent Arrested in Latvia and Extradited to Face Charges on $12 Million Fraud Scheme

Alexander Avergoon, a longtime San Diego real estate agent and businessman, was arraigned in federal court today following his extradition Thursday from Latvia to San Diego to face charges stemming from two investment fraud schemes in which he stole more than $12 million from unwitting investors.

Avergoon made his initial appearance today before U.S. Magistrate Judge Burkhardt. At the hearing, prosecutors moved to detain Avergoon based on his risk of flight. A detention hearing is scheduled for November 19 at 9:00 a.m. before U.S. Magistrate Judge Burkhardt.

Avergoon was indicted in August in the Southern District of California. He was located by Latvian law enforcement authorities and arrested in October. He was transferred to San Diego on Thursday.

The indictment, which was unsealed in October and provided to Latvian authorities, details Avergoon’s long-running schemes to defraud San Diego investors by pretending to use their money to buy and invest in real estate around San Diego County. Using his connections and reputation as a real estate agent, Avergoon scammed his clients and real estate investors by arranging fictitious real estate purchases and by selling them the rights to collect on fictitious loans.

From as early as 2010, Avergoon invited his victims to partner with him to purchase multi-unit apartment buildings or commercial office space, promising that the rental income would generate monthly dividends and that the investors would share in the appreciation when the properties were eventually sold. After collecting the money from investors, Avergoon told them he had purchased the buildings, and promised to service the rentals and distribute the rental income. In reality, Avergoon never actually bought these buildings; instead, he diverted the investors’ money to his own use. In order to sustain the illusion that the investment was legitimate, Avergoon made years’ worth of regular monthly payments to the investors, telling them the money came from rent payments.

In another scheme, the indictment charges that Avergoon offered additional victim investors the “opportunity” to earn approximately 8 to 20 percent interest on short-term loans to homeowners, and pretended to act as a broker between investors and homeowners. In reality, the homeowners were not working with Avergoon, did not agree to borrow money from the investors, and never signed the loan agreements Avergoon presented to his investor clients. Avergoon forged the loan documents—and the signatures on deeds of trust. He then simply diverted the investors’ money to his own use.

Source: https://www.justice.gov/usao-sdca/pr/san-diego-real-estate-agent-arrested-latvia-and-extradited-face-charges-12-million