EUGENE, Ore. (AP) — A 68-year-old man has pleaded guilty to mail fraud and money laundering in a swindle that cost investors more than $18 million. Federal prosecutors say many of Louis J. Borstelmann’s victims are residents of Florence, Ore.
The Thousand Oaks, Calif., man entered his plea Tuesday in federal court in Eugene, admitting he solicited about 100 people to invest in real estate through his company Sunburst Associates. Borstelmann falsely promised high rates of return and a security interest in property. In court, he admitted the alleged investments never existed and it was all a Ponzi scheme, in which he used new investor money to pay older investment obligations. He also admitted spending investor money on personal items like a home and a car.
Sentencing is scheduled June 14. The maximum penalty for mail fraud is 20 years and a $250,000 fine while money laundering is punishable by a maximum 10 years and a $250,000 fine.
