David Shelofsky Sentenced in $Million Fraud Scheme

David A. Shelofsky, 53, of West Linn, Oregon, is headed to federal prison for 70 months after masterminding a sprawling investment fraud scheme that raked in millions from unsuspecting lenders and individual investors. Posing as a high-powered real estate developer, hemp seed mogul, and precious metals mining entrepreneur, Shelofsky spun a web of lies that unraveled into one of Oregon’s most brazen financial fraud cases in recent years.

Court documents reveal that beginning in 2013, Shelofsky launched multiple fraudulent ventures, falsely claiming successful real estate developments in Bend and West Linn, a thriving hemp seed cultivation operation, and a proprietary mining technique capable of extracting gold from industrial tailings. In reality, the projects were ghost operations — thinly veiled fronts used to funnel investor cash into Shelofsky’s personal accounts to fund a lavish lifestyle marked by luxury expenses and financial excess.

Shelofsky didn’t work alone. He enlisted a lawyer to draft fraudulent contracts and an assistant to open bank accounts under the names of shell LLCs, lending an air of legitimacy to his cons. He promised sky-high returns on investments in real estate, precious metals, and hemp — all lies. Investors, many with deep ties to Oregon communities, lost millions. Their money vanished into personal expenditures, not development ventures.

“David Shelofsky tried every possible ploy to trick investors out of their money, and, unfortunately, was quite successful in doing so,” said Scott Erik Asphaug, Acting U.S. Attorney for the District of Oregon. Federal authorities stressed the importance of due diligence, warning the public that too often, “unconventional” investment pitches are nothing more than modern-day confidence games wrapped in corporate jargon.

The FBI and IRS Criminal Investigation led the probe, exposing Shelofsky’s pattern of wire fraud and money laundering. On June 5, 2020, he was charged by criminal complaint. A 17-count federal indictment followed on October 20, 2020. On August 26, 2021, Shelofsky pleaded guilty. He now faces three years of supervised release post-incarceration. A restitution hearing is set for January 7, 2022, before U.S. District Court Judge Michael H. Simon.

“His golden guarantees were nothing more than lies,” said Kieran L. Ramsey, FBI Special Agent in Charge in Oregon. Bret Kressin of IRS:CI added that financial crimes like Shelofsky’s devastate communities and that investigators remain committed to holding fraudsters accountable. Assistant U.S. Attorneys Claire M. Fay and Katie DeVilliers handled prosecution and forfeiture, respectively, as federal authorities send a clear message: rip-off artists posing as entrepreneurs will face hard time.