Man admits scamming investors in Genoa Lakes purchase scheme
February 14, 2014
A man who fraudulently borrowed $3.6 million to buy the Genoa Lakes Golf Courses faces a May 29 sentencing date after he admitted to two dozen federal felony charges on Wednesday.
The courses actually sold last month for only $3.25 million, according to the Douglas County Assessor's Office.
Former South Lake Tahoe resident Scott H. Summerhays, 55, is being held in Reno after he pleaded guilty during the first day of his trial on 14 counts of wire fraud, seven counts of money laundering, two counts of identity theft, and one count of aggravated identity theft, according to the U.S. Attorney's Office.
Summerhays faces more than 30 years in prison and fines of up to $5.7 million.
"This is the second person to be convicted or sentenced of federal investment fraud charges in the northern Nevada area this week," said U.S. Attorney Daniel G. Bogden. "In both cases, the defendants led their victims to believe that they were legitimate businessmen and used fraudulent documents to support their scheme."
According to the court records, during 2008 to 2010, Summerhays represented to potential investors that he was purchasing the Genoa Lakes Golf Club for $17 million and needed a short-term loan to complete the deal because his own money was tied up in a trust.
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Summerhays also represented to the potential investors that he solicited funds for oil and gas investments in Texas and owned over $30 million in Berkshire, Las Vegas Sands and MGM stock. Summerhays showed some of the investors a fraudulent investment account statement. Summerhays also claimed that he was in partnership with Las Vegas Sands owner Sheldon Aldelson, and showed potential investors a partnership agreement containing the forged signature of Adelson. In reality, Summerhays had no investment portfolio, and Adelson never heard of Summerhays or had any partnerships with him. Using this scheme, Summerhays was able to convince 11 people to loan him money for the golf course, totaling approximately $3.6 million. None of the investors were repaid and they lost all of the money they loaned Summerhays.
The case was investigated by the FBI and IRS Criminal Investigation, and prosecuted by Assistant U.S. Attorneys Ronald C. Rachow and Megan Rachow.
According to the Washoe County Sheriff's Office, Summerhays was booked on April 10, 2012, and is being held without bail.
The golf course had been for sale for years, and was placed in receivership in 2012. It was purchased by Genoa Golf Group IV LLC on Jan. 22.