A Redding man has entered a guilty plea in an investment fraud case.
Robert E. Rosenau today pleaded guilty in federal court in Sacramento to one count of mail fraud.
According to court documents, Rosenau was employed by and had management control of Rosenau Investments Inc., a hard money lender specializing in short-term loans for real estate rehabilitation. Rosenau Investments obtained the money for loans from individual investors whose loans were associated with specific properties.The firm told its investors that it did not loan money on properties with a loan to value ratio of more than 70 percent and that it maintained a lien on the properties in a primary position, according to a federal Department of Justice news release.
In 2007, as the real estate market was in collapse, Rosenau Investments was having difficulty collecting payments from its borrowers and the properties it was lending on had little or no equity in them, authorities said. Nevertheless, in January 2008, Rosenau told investors that the company was not having problems obtaining payments from borrowers and that new investment opportunities were available.
In one case, authorities said, the property at issue had already been foreclosed upon by Rosenau Investments when the borrower failed to pay on the loan. In the other case, investors' money was used for a loan on property that Rosenau owned through another company, and Rosenau had already obtained loans that greatly exceeded the property's value. Furthermore, Rosenau investments did not have a lien on the property.
Had the investors been aware of these facts, they would not have invested with Rosenau, authorities said.
Rosenau is to be sentenced by U.S. District Judge William B. Shubb on Dec. 3.
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