2 Irvine Men Get Prison Terms for Real Estate Scam

Two Irvine men were sentenced to federal prison Monday for their roles in a real estate scheme that cost investors $7 million.

James R. Anderson, 41, was sentenced to five years in prison, and Richard Shane, 40, to four years in prison. U.S. District Judge Terry J. Hatter Jr. also ordered each man to make restitution of $7 million.

Anderson and Shane were principals in Equity Securities Inc. of Newport Beach, which operated between 1983 and 1986 as an investment brokerage offering second trust deeds to investors directly and through intermediaries.

The firm offered high rates of return on delinquent trust deeds purportedly purchased from lenders, according to Assistant U.S. Atty. William F. Fahey. Anderson and Shane told prospective investors the deeds had been purchased during foreclosures.

Deeds Never Recorded

Prosecutors said a majority of the second trust deeds sold to would-be investors were never recorded, leaving investors with no protection for their money.

In fact, “a majority were not actually purchased by Equity at all but simply fraudulently prepared in order to lure investors into providing money,” according to a spokesman for U.S. Atty. Robert C. Bonner.

The victims were 65 individual and corporate investors, according to prosecutors.

Both Anderson and Shane were charged with mail fraud in the scheme.

The Equity Securities swindle was uncovered after a joint investigation by the U.S. attorney’s office, the U.S. Postal Service inspector’s office, the major fraud unit of the California Department of Justice and the Newport Beach Police Department.