For release on August 15, 2014

CONTACT:
Katharina L. Wells, Deputy District Attorney
Real Estate Fraud Unit
(408) 792-2530

SENTENCED TO PRISON: SOUTH BAY BUSINESSMEN FRAUDULENTLY INVESTED IN DILAPIDATED DETROIT HOMES     Two officials of a South Bay Area real estate investment company were sentenced this week to lengthy prison sentences for stealing and fraudulently misusing millions of dollars of their clients’ money. The scheme included investing unwitting clients’ money 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. They pleaded guilty to multiple felonies on April 28, 2014. The Honorable Shelyna V. Brown sentenced defendant Brown, who is from the San Jose area, to 15 years; and 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.”   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, Michigan. The properties had not been rehabilitated. Many were uninhabitable, empty, vandalized, and not rented out. Some had been condemned. Title was not transferred to certain investors as represented. Some properties were sold simultaneously to other investors. Most of the investors lost all of their money.   After he was arrested, authorities seized Kabajouzian’s Aston Martin and sold it at an auction. Brown was arrested late last year in a Las Vegas casino.   ###