STUDIO CITY—On Monday, October 3, ex-president and CEPO of the now defunct Sherman Oaks based brokerage and investment firm was sentenced to 15 years in federal prison for a real estate investment scam that caused about five dozen investors to lose nearly $4 million. David Williams pleaded guilty to fraud charges stemming from an investment scheme that misappropriated nearly $6 million. According to reports, William admitted that he used Morgan Peabody representatives to sell securities .
The United States Attorney’s Office for the Central District of California, announced that the sentence was handed down to the 54-year-old by United States District Judge Dale S. Fischer. Williams’ business, Sherwood Secured Investment Fund, LLC, offered contributors a 9 percent annual return on their investment. Williams admitted in the plea that he used the majority of investor money from the Sherwood Fund to pay for personal expenses.
The majority of the $3.75 million investors contributed to the fund was used to pay for personal expenses including lavish vacations and a $50,000 per month lease on a $6 million residence in Toluca Lake, prosecutors said. Williams fraudulently obtained those funds from over 69 investors between June 2007 and April 2008.
Williams was ordered to pay back in restitution $5.1 million to the victims of the fraud scheme, $777,881 to the IRS, and $258,940 to the California Franchise Tax Board.
“This sentence serves as a warning to criminals who commit fraud that they face very serious consequences,” said United States Attorney Eileen M. Decker in a statement. “The defendant callously stole the hard-earned retirement savings of numerous victims and spent it on himself. His greed and lack of remorse will continue to harm his victims for many years to come, but now he too will be paying a price for more than a decade.”