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Dec. 2, 2023

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Vancouver man gets more than 6 years for Ponzi scheme that cost investors $4.3 million

By , Columbian staff reporter

A Vancouver man was sentenced Friday to 6¼ years in federal prison for a Ponzi scheme that defrauded 32 investors, most of them close friends and family, of $4.3 million.

Charles Richard Burgess, who goes by the first name Dick, pleaded guilty in August to a federal charge of mail fraud in U.S. District Court in Tacoma.

The charging information, filed Aug. 4, states that between 1995 and April 2021, Burgess sold investments in an unregistered investment vehicle that he called “the pool.” It states he sold investments to 64 investors totaling $13.6 million. Burgess was never a registered investment adviser and solicited investments from people who trusted him, such as friends and family members.

When people agreed to invest, Burgess instructed them to create a self-directed IRA account and wire money from that account to an account controlled by Burgess, according to the information.

Between about August 2013 and July 2021, Burgess ran a Ponzi scheme; he told investors he’d invest their money into a pool with a history of excellent performance and that he’d be paid 50 percent of the pool’s profits, according to court records.

Instead, the information states Burgess “overstated the past performance of the fund, misrepresented the value of investors’ investments on monthly statements, used funds provided by new investors to repay earlier investors and took for himself far more than the agreed 50 percent of pool profits.”

Prosecutors requested Burgess, 67, be sentenced to 97 months in prison, citing aggravating factors of betraying a position of trust, the duration of the crime spanning many years and the amount of money lost. Assistant U.S. Attorney Seth Wilkinson said once Burgess was under investigation in 2021, he continued to deceive investors by blaming their financial losses on the COVID-19 pandemic and tried to get them to sign settlement forms releasing their claims against him.

“To put it simply, the defendant knowingly wrecked people’s lives,” Wilkinson said. “He lied to people who trusted him to get their money. He lied to them about where the money had gone. He did this day after day, month after month, year after year. And then, when it was too late — many of these victims were near retirement, in retirement — he told them it was all gone.”

Although the investments lost totaled just more than $4.3 million, Wilkinson said the true scope of the damage to the investors was $10.3 million because that’s how much Burgess told them their investments were worth, at one point.

“He told them that, collectively, they had $10.3 million. Those were the numbers that these people were planning their lives around,” Wilkinson said. “So $10.3 million is the magnitude of the rug the defendant yanked out from these people when he told them their money was gone overnight.”

Burgess’ defense attorney, Todd Maybrown, asked for a sentence of 30 months, saying Burgess has accepted responsibility for the harm he caused and that he has no criminal history.

U.S. District Judge David G. Estudillo heard from several victims and read additional statements submitted to the court before the hearing. Some of the victims who spoke Friday included a friend of Burgess’ dating back to middle school and a 91-year-old woman. They described how they trusted Burgess and the ways he continued to make them think their investments were thriving, when, in reality, they were not.

When ordering Burgess’ 75-month sentence, Estudillo acknowledged Burgess’ age, his recent medical issues, the fact any substantial sentence could be a life sentence and the unlikelihood he would reoffend.

The judge also said he wished he had words of wisdom for Burgess’ victims, many of whom he said Burgess placed in a financial crisis, but that the impact on them will likely be long lasting.

“Like anything, once sentencing has been imposed, hopefully that brings some sort of closure to all the people that have been involved,” Estudillo said. “But certainly, it won’t bring the relief that everybody would want to have, if it was a perfect world for them.”

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