A Coronado businessman admitted in federal court May 19 to participating in a scheme where he and a partner obtained tens of millions of dollars in fraudulently obtained loan proceeds. Courtland Gettel, 42, pleaded guilty to conspiracy and wire fraud in San Diego federal court a day after a co-defendant, attorney Jeffrey Greenberg of Tucson, Arizona, entered comparable pleas in the case. Gettel and Greenberg, 66, generated their huge illicit profits by taking out loans against multimillion-dollar homes in La Jolla and Del Mar, then pretending the debts had been paid off in order to secure more loans from new lenders, court documents state.
To pull off the scam, Gettel, Greenberg and their co-conspirators created phony real estate lien releases and recorded fraudulent records at the San Diego County Recorder’s Office, then defaulted on their obligations to repay the loans, according to prosecutors.
Gettel ran a real estate investment firm known both as Conix Inc. and Variant Commercial Real Estate. It refurbished single-family homes, purchased distressed debt, and purchased and refurbished commercial real estate projects.
As part of his plea, Gettel admitted that he and an informal business partner acquired high-end homes in La Jolla and Del Mar by claiming that they intended to use them as luxury rental properties, though they in fact wound up living in them along with their families. When they needed money to fund other business deals, Gettel and his partner began negotiating with new lenders, pretending that the earlier loans had never existed at all or were fully paid off.
Greenberg, their lawyer, admitted that he used his expertise to generate
and record fraudulent records, making it appear that prior loans were paid off.
The deceit went on for more than a year, during which time Gettel,
Greenberg and their co-conspirators obtained at least $33.6 million in fraudulent proceeds from no less than eight multimillion-dollar fraudulent loans.
Gettel relied on Greenberg to help hide the true nature of the transactions, directing the proceeds to the attorney’s bank accounts before distributing the money further, court documents state.
In late 2014, lenders uncovered the fraud and began to discover that their secured interests in the properties were worthless.
Greenberg also pleaded guilty to participating in an equally sizable fraud that occurred in Tucson, where he worked for Conix and VCRE.
In that scheme, Greenberg and his co-conspirators obtained tens of millions of dollars in unearned payments from a real estate financing firm by creating false invoices and expense reports for work purportedly performed on their commercial real estate portfolio, according to the U.S. Attorney’s Office in San Diego. Instead of using the money to refurbish their commercial properties as required, Greenberg and his co-conspirators spent it on themselves, prosecutors alleged.
As part of their pleas, Gettel and Greenberg agreed to forfeit the proceeds they stole from the various lenders and pay restitution to the victims.
Both defendants are scheduled to be sentenced Aug. 8.