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Developer Guilty of Bilking Investors

Monday, October 22, 2012

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A Washington State developer who promised ‘extraordinary returns’ on investments in his properties is headed to prison after his conviction on criminal charges.

A King County, WA, jury has returned guilty verdicts against Laurance D. Anthone, owner of MA Quik Framing Inc. and Anthone Properties, on eight of 10 criminal counts of theft and securities fraud. The jury hung on the last two charges.

 Washington State’s Securities Division issued two Cease and Desist orders against Laurance Anthone in 2005 for bogus investment schemes involving two companies.

 SalesHQ

Washington State’s Securities Division issued two Cease and Desist orders against Laurance Anthone in 2005 for bogus investment schemes involving two companies.

The verdict, returned Wednesday (Oct. 17), was just the latest chapter in the checkered history of Anthone, of Federal Way, WA, a familiar figure to Seattle-area authorities for nearly a decade.

Anthone faces 33 to 43 months in prison when he is sentenced Dec. 7. He is not in custody, prosecutors said.

Earlier Actions

In August 2005, the state’s Department of Financial Institutions’ Securities Division charged that Anthone and Anthone Properties had defrauded investors in the development of a project called ‘Eden Estates’ and that Anthone had misrepresented himself as a licensed securities dealer.

Authorities fined Anthone $60,000 in that case and issued an ‘emergency’ Cease and Desist Order, saying that quick action was needed to protect the investing public from him.

It was the second such order against Anthone that year. In January, the same agency issued a Cease and Desist Order against Anthone and his other company, MA Quik Framing Inc., for defrauding five other investors of a total of $100,000.

In that case, court documents say, he promised to pay investors ‘an extraordinary return (typically 200%) within a four or six-month period.’ Anthone was fined $10,000 in the MA Quik Framing case.

In previous civil cases dating to 2004, victims of Anthone's schemes were awarded $600,000 in damages, according to reports. Those cases were resolved before Anthone was charged with his current crimes in August 2008.

Years of Scheming

In the current case, prosecutors say Anthone took more than $600,000 in investment capital from business owners through a number of schemes from early 2003 to August 2005.

A three-year statute of limitations prohibited prosecution for some of his activities, authorities said. And the 19 counts he originally faced in the current case were amended over time to 10.

Prosecutors said Anthone offered to sell at least 31 investors commercial or residential space in buildings he claimed to be building or had an interest. Anthone, then 45, accepted investments ranging from $10,000 to $327,000 from at least six investors after talking them into locating their commercial enterprises inside the developments, authorities said.

His victims included a recently laid-off Boeing Company employee, who was persuaded to draw down her retirement fund and refinance her home mortgage in order to buy office space.

‘Fluent in the arcane language of real estate, Anthone wore the cloak of experience and success,’ according to the Seattle Post-Intelligencer.

How it Worked

The state's trial memo said Anthone had decided to become a property developer ‘after working several years in the construction business with little or no experience in property development.’ The unlicensed contractor opened his office in late 2002 or early 2003, decorating it with maps and architectural drawings of Eden Estates, Queen’s Plaza, and other projects, the state said.

Then, he began to solicit family, friends and acquaintances to invest with him. He spent little or no money of his own on the projects.

Anthone bought properties that were difficult to develop, ‘often promising owners a price above market value if the owners would agree to carry a contract and to subordinate their interest to a construction lender,’ court documents said. He gave the owners promissory notes, then soon defaulted, prosecutors said.

Investors, meanwhile, were ‘enticed to invest in 'joint venture' or 'profit-sharing' agreements by Anthone's promises of high returns or developed lots.’ The money went into Anthone's accounts, and then generally to his personal expenses, prosecutors said.

‘Little of the investors' money was used to develop any property,’ the memo noted. When the projects failed to materialize, Anthone refused to return the money.

Blaming ‘Bad Buyers’

In a 2005 interview with the Post-Intelligencer, while facing as many as 14 civil lawsuits, Anthone said he was the victim of an orchestrated attack by former employees and ‘bad buyers.’

The contractor/developer said the lawsuits and harassment by investors had hindered his business and his ability to complete projects.

At that time, he said he was working 20 hours a day to ‘get the projects done.’

   

Tagged categories: Contractors; Criminal acts; Laws and litigation

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