Ex-fugitive from Newport Beach sentenced to 34 years in prison for running $3-million Ponzi scheme

A Newport Beach man who fled the country and evaded authorities for years after he was accused of running a $3-million Ponzi scheme was sentenced Friday to 34 years and four months in state prison.

Thomas Franklin Tarbutton, 58, was found guilty by an Orange County Superior Court jury in 2016 of 18 counts of grand theft, nine counts of forgery, 11 counts of using an untrue statement in the purchase or sale of a security and one count of use of a device or scheme to defraud, all felonies.

The jury also found him guilty of sentencing enhancements for loss of over $100,000, property loss over $3.2 million and aggravated white-collar crime of over $500,000, according to court records.

Between 2004 and 2010, Tarbutton operated Villa Capital Inc. as a “hard money” lender, soliciting funds from private investors for borrowers who didn’t want to go through the banking system, according to the Orange County district attorney’s office.

Prosecutors said Tarbutton defrauded 11 investors who thought they were lending money for real estate mortgages. Instead of funding the loans, Tarbutton would keep the money and show the investors fake or forged documents that showed they were lienholders on properties in Orange and Los Angeles counties.

To keep them from discovering that the investments were underperforming or the loans were never made at all, Tarbutton would pay small amounts that he described as interest from the loans, prosecutors said.

In summer 2010, after the real estate market crashed, Tarbutton stopped making payments.

Prosecutors said four investors reported suspicions of fraud to the Federal Bureau of Investigation in October 2010, and a year later, a warrant was issued for Tarbutton’s arrest.

Tarbutton fled to Brazil and was detained in December 2013 while trying to cross from Panama to Costa Rica, authorities said.

hannah.fry@latimes.com

Twitter: @HannahFryTCN