AUSTIN (CN) - A Corpus Christi, Texas, man pleaded guilty for his role in a $7 million real estate Ponzi scheme that hurt hundreds of investors, federal prosecutors say.
Roland Langguth, 71, pleaded guilty to one count of wire fraud and one count of money laundering in the Western District of Texas on Tuesday. He admitted he ran the scheme from November 2005 to December 2009, and that he knowingly laundered the proceeds in July 2008.
"Langguth admitted he falsely represented to investors that they were buying a participation in a real estate bridge loan, evidenced by a note, secured, in most cases, by a first lien on real property," prosecutors said in a statement. "Langguth promised investors that he would pass through their share of the monthly interest payments made by borrowers on the bridge loan. He also promised that when the borrower paid off the bridge loan, the balance of the investment would be returned to the investor."
Prosecutors said Langguth's scheme involved several business entities, including Capital Finance, Paris Properties and Paris RE.
Langguth admitted that he orchestrated the scheme to enrich himself and keep it going.
Under the terms of a plea agreement, both sides will recommend a 48-month prison sentence to U.S. District Judge Lee Yeakel. A sentencing date has not been set.