SAN JOSE, Calif. - Two South Bay businessmen have been sentenced to prison for defrauding investors and investing millions of dollars into dilapidated Detroit homes.
Terrance Brown, 48, and Antranik Kabajouzian, 32, co-founders of the Bay Area Equity Group, bilked investors out of almost 5 million dollars.
The two pleaded guilty to multiple felonies on April 28.
Brown, who is from the San Jose area, was sentenced to 15 years in state prison. Kabajouzian, of Morgan Hill, to 10 years in state prison.
Judge Brown ordered restitution to be paid to all of the victims.
"It is heartbreaking to see hard-working people lose their life savings to con artists," said Deputy District Attorney Katharina L. Wells. "Of course we would love to be able to give the money back to the victims but usually in a large Ponzi scheme such as this, the money is gone."
According to Wells, over the course of several years, Brown and Kabajouzian convinced investors to put their money, in some cases their life savings, into out-of-state properties. The businessmen assured the investors that the homes were habitable, completely rehabilitated, and occupied. They guaranteed a 15 percent rate of return. In reality, many of the properties were located in the depressed real estate market of Detroit, and had not be rehabbed. Many were uninhabitable, vandalized and vacant. In some situations, the title was not transferred to certain investors as represented and some properties were sold simultaneously to other investors.