Boise real estate agent accused of running $82M Ponzi scheme that defrauded investors
Feb. 28, 2022 Updated Mon., Feb. 28, 2022 at 10:02 p.m.
A Boise man who allegedly preyed on Christians, using biblical quotes to entice them to invest in Arizona real estate, is accused of operating a Ponzi scheme and scamming investors out of more than $82 million.
Bradley R. Heinrichs, 41, was indicted in Arizona on four counts of fraudulent schemes and artifices, illegal control of an enterprise, theft and conspiracy, all felonies. He has pleaded not guilty.
“Out of respect for the legal process, we are not going to comment on the allegations against Mr. Heinrichs, except to say that he denies them,” Phoenix lawyer Anne Chapman said by email. “There are multiple sides to every story, and Mr. Heinrichs is allowing the legal process to take its course.”
Heinrichs is listed as manager of Anthology real estate, 421 S. 8th St. in Boise, according to records from the Idaho secretary of state’s office. If convicted, Heinrichs could face a sentence of 4.5 years to 69 years in prison.
The indictment was announced in March 2021 – nearly six years after the crimes were alleged to have taken place. A trial date is scheduled to be set April 14.
A settlement conference between a deputy Arizona attorney general and Chapman was held earlier this month, but a resolution was not reached.
A spokesperson for the attorney general’s office did not reply to a telephone call and email.
A records request submitted to the Idaho attorney general’s office did not reveal any investigations into Heinrich’s conduct in Idaho.
The Arizona attorney general’s office, which reviewed more than 75,000 pages of documents, said Heinrichs and a co-defendant, Stephen J. Hatch, operated a racketeering enterprise involving the sale of Arizona real estate between January 2005 and December 2014.
The pair promised double-digit returns to more than 110 investors, including many from Idaho, prosecutors said.
Business partner spent five years in prison
Hatch, now 72, pleaded guilty in 2017 to one felony count of fraud and was sentenced to five years in prison. In exchange for Hatch’s guilty pleas, prosecutors agreed not to charge his children, who were paid lavish salaries and were allegedly involved in the scam.
Hatch, who was ordered to pay $1 million in restitution, was released from prison in September and remains under community supervision, according to Arizona Department of Corrections records.
In a Ponzi scheme, money from later investors is used to pay off earlier investors to make it appear there are profits. When incoming cash dries up, the scheme falls apart.
Heinrichs told investors “that his company wanted to give an opportunity to ‘Christian families’ to invest, how God was using their company to support missions and that they wanted to pass the blessing along to the ‘little guy’ who normally wouldn’t have an opportunity like this”, according to a court filing from a group that formed to seek restitution for the victims from Heinrichs and Hatch.
The group said Heinrichs falsely told investors that Hatch was worth between $15 million and $20 million and didn’t need money. Henrichs told investors Hatch had been in the real estate business for many years and came out of retirement to help other people, mainly his children, learn the business, the group said.
The group, the Hatch/Heinrichs Victims Recovery Fund, said Heinrichs “promised some investors annual returns as high as 25%.”
Heinrichs is accused of lying to investors about missing payments. Prosecutors say he regularly sent investors statements showing increasing interest earnings without telling them there was not enough money to make earnings payments.
Heinrich and Hatch created more than 30 business entities and managed 17 sets of books to buy 13 properties.
Hatch was responsible for locating, acquiring, development and rezoning properties, while Heinrichs was responsible for recruiting investors, a letter from the attorney general’s office said.
Boise physician among Ponzi scheme victims
Dr. Richard Blickenstaff, a Boise dermatologist, initially invested $227,800 with Heinrichs, according to a letter to a judge from the Arizona attorney general’s office. He added $100,000 more in June 2014.
Blickenstaff, who supplied the Idaho Statesman with documents from the case, lived in the same Idaho subdivision as Heinrichs’ parents, and they attended the same church. Heinrichs’ sister was a friend of Blickenstaff’s son, so Richard Blickenstaff also knew Heinrichs.
“Through this relationship, Heinrichs solicited investments,” the letter said. “He told Blickenstaff that Hatch was a Christian, a man of impeccable character, had a long history of successful real estate ventures and had delivered promised return to investors in all of his previous projects.”
Five months after Blickenstaff provided Heinrichs with the $100,000, Heinrichs told Blickenstaff that Hatch had misappropriated money from the investments.
“When Blickenstaff asked him how he could have taken another $100,000 from him knowing there were improprieties and red flags with regard to fraud and mismanagement, he said ‘that is something I am struggling with,’” the letter said.
A second victim from Boise, who lost an undisclosed amount of money, declined to comment when contacted by the Statesman.
The allegations are similar to those in Idaho’s largest Ponzi scheme, in which executives of Diversified Business Services and Investments, known as DBSI, defrauded 8,500 investors and suppliers out of $102 billion.
CEO Doug Swenson, convicted in 2014 of 44 counts of securities fraud and 34 counts of wire fraud, was sentenced to 20 years in prison. Three other executives, including Swenson’s two sons, were sentenced to three to five years in prison.
DBSI operated legitimately for many years before aggressively buying up office buildings and offering investors shares in the buildings. Cash flow problems eventually led the executives to pay investors with money supplied by new investors as profits soured.
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