For release on June 17, 2014 CONTACT: Georg Behrens, Deputy District Attorney Major Fraud Unit (408) 792-2964
DEVELOPER GETS PRISON FOR FRAUDULENT CONDO INVESTMENT SCHEME A San Jose real estate developer was sentenced today to eight years in prison for securities violations leading to a loss of more than $2.8 million to investors who committed their money to a pair of downtown condominium projects. Gilmore Erickson’s investors lost their money and his high-rise projects never broke ground. The 72-year-old Los Gatos man, who was ordered by the Hon. Hector Ramon to pay full restitution, was convicted earlier this year of a series of charges including securities fraud and grand theft.
Doing business under the names Northpoint Development, Grandpoint Community Builders, and Next Group, Erickson ran a real estate development company that claimed to control several prominent sites for high-rise development in downtown San Jose. He and his associates solicited investors for real estate development projects that included Delmas Towers, a condominium complex they planned to construct on Delmas Avenue, and Fifth Street Towers, a complex they planned to build on Santa Clara Street between Fifth and Sixth Streets. Advertising through a real estate investment club with a strong presence in the Bay Area, Erickson obtained several million dollars from about 40 investors. But an investigation, first launched by the FBI and then pursued by the D.A.’s Office and the California Department of Business Oversight, showed that he did so by misrepresenting and failing to disclose key facts about himself and about the financing of the projects, in violation of securities law. Erickson misled investors into believing that their investments would be safe because they would be guaranteed by a family trust worth tens of millions of dollars. He also failed to disclose to investors that he had previously been convicted of Grand Theft in connection with a similar real estate development scheme. This investigation was carried out by Enforcement Attorney Kelly Shinnick and Investigator Jennifer Marks of the California Department of Corporations (now the Department of Business Oversight) in conjunction with Investigator Nicholas Olson of the Santa Clara County District Attorney’s Office, following an initial investigation by the Federal Bureau of Investigation. ###