Fraud and Prevention

Georgia Attorney Sentenced to 10 Years for Real Estate Scheme

By James Comtois
August 26, 2009

After pleading guilty in April to wire fraud in connection to a $40 million real estate investment fraud scheme, Robert P. Copeland, a real estate and elder law attorney from Marietta, Ga., was sentenced to serve 10 years and one month in federal prison, followed by three years of supervised release.

U.S. District Judge Beverly B. Martin also ordered Copeland to pay $16.7 million in restitution. The U.S. has also seized or frozen numerous assets relating to Copeland's scheme, including 12 real estate properties, bank accounts, artwork, jewelry, automobiles and stock certificates.

According to David E. Nahmias, U.S. attorney for the Northern District of Georgia, Copeland operated a Ponzi scheme from at least 2004 through early 2009 where he solicited individuals directly, through seminars he participated in and through financial planners to whom he paid commissions in exchange for referrals of investment clients.

Copeland falsely represented that he would use an investor's money in lucrative real estate financing and/or development activities, such as by funding a mortgage or bridge loan to a real estate purchaser who needed financing.

Typically, Copeland would promise returns as high as 15% every six to 12 months, and would furnish the investor a note and security deed that would purport to document the investor's secured interest in a particular piece of real estate. Based on these representations, Copeland raised more than $40 million since 2004 from hundreds of investors nationwide. Some of these investments constituted retirement funds.

However, Copeland was engaged in little if any real estate financing, development, or other profit-making activities with investor funds. The notes and security deeds he furnished investors were in almost all cases bogus. Instead of using investor funds in the ways he had represented, he used new investments to pay earlier investors the distributions that he had promised.

When the time came to pay the new investors, he would have to solicit and take in yet more investments. This created an unsustainable and ever-expanding mountain of debt. When the scheme collapsed in early 2009, Copeland was left owing more than $28 million to more than 125 victims. The case remains under investigation.