A federal grand jury in San Francisco indicted James B. Catledge, of Rancho Santa Fe, and Derek F.C. Elliott, of Orangeville, Ontario, Canada, on Sept. 18, with one count of conspiracy to commit mail fraud and three counts of mail fraud, United States Attorney Melinda Haag announced. The charges allege a scheme in which Catledge and Elliott fraudulently solicited more than $90 million from investors to build a resort in the Dominican Republic, but the resort never opened.
According to the indictment, Catledge, 45, and Elliott, 42, used a bank loan to purchase an old hotel in the Dominican Republic, which they called the Juan Dolio Resort. They then began to renovate the hotel and to solicit investments in the resort. The indictment further alleges that in their sales pitch, Catledge and Elliot failed to tell investors that the full commissions being taken from their investment were approximately 44 percent, that the renovations were underfunded, that investors’ money was being used on other projects, and the returns they promised were unsupportable and could not be achieved. Catledge and Elliott collected approximately $91.3 million from investors. Of that amount, they allegedly spent approximately $13.4 million on renovations of the Juan Dolio resort and diverted approximately $68.6 million to commissions and other payments. The renovations were never completed.
Catledge is scheduled to be arraigned on Oct. 5, 2012, before Magistrate Judge Joseph C. Spero in San Francisco. A court date has not yet been set for Elliott.
The maximum statutory penalty for each count of conspiracy to commit mail fraud and mail fraud in violation of Title 18, United States Code Sections 1349 and 1341, respectively, is 20 years’ imprisonment, a fine of $250,000 or twice the total loss, and restitution. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
— FBI press release
— FBI press release