PORTLAND, Ore.—A West Linn, Oregon man was sentenced to federal prison today for posing as a successful real estate developer, hemp seed cultivator, and owner of a precious metals mining venture to fraudulently obtain millions of dollars from individual investors and lenders.
David A Shelofsky, 53, was sentenced to 70 months in federal prison and three years’ supervised release.
“David Shelofsky tried every possible ploy to trick investors out of their money, and, unfortunately, was quite successful in doing so,” said Scott Erik Asphaug, Acting U.S. Attorney for the District of Oregon. “Federal law enforcement authorities will continue to pursue and prosecute bad actors who seek to steal from well-intentioned investors. Meanwhile, we strongly encourage people to think twice and do extensive research before pursuing unconventional investment opportunities like the ones peddled by this defendant.”
“David Shelofsky promised big returns on an eclectic array of investments, including real estate, precious metals, and hemp seed. In reality, his golden guarantees were nothing more than lies. Victim investors—most of whom have ties to Oregon—lost millions while their money funded Shelofsky’s lavish lifestyle,” said Kieran L. Ramsey, Special Agent in Charge of the FBI in Oregon.
“IRS Criminal Investigation (IRS:CI) is committed to protecting the public from individuals like David Shelofsky who shamelessly steal and defraud,” said Special Agent in Charge Bret Kressin of IRS:CI. “Because financial crimes devastate communities, we will continue to investigate and bring to justice those who commit these crimes.”
According to court documents, beginning in 2013, in Oregon and elsewhere, Shelofsky knowingly and intentionally devised several different investment fraud schemes. Shelofsky falsely told prospective investors and lenders that he had successful real estate development projects in Bend, Oregon and West Linn and a successful hemp seed cultivation and distribution venture in West Linn. During the same time period, Shelofsky and two other individuals formed a precious metals mining operation that purportedly used a proprietary mining technique to extract precious metals from the sand tailings of other mining operations. While the group made minimal efforts to operate the venture, Shelofsky misled several investors about the status of the operation to fraudulently obtain funds.
Shelofsky made repeated and deliberate misrepresentations and false promises about the status and success of his various ventures, the purported returns investors would receive, and the existence of collateral pieces of real estate supposedly backing investments. Shelofsky employed the services of others to further his schemes and establish his credibility, including a lawyer to create legal documents and an assistant to open bank accounts in the names of several limited liability corporations. Shelofsky used investor funds for personal expenses and to support his own high standard of living. Dozens of individual investors and lenders lost millions of dollars as a result of Shelofsky’s schemes.
On June 5, 2020, Shelofsky was charged by criminal complaint with wire fraud and money laundering. Later, on October 20, 2020, a federal grand jury in Portland returned a 17-count indictment charging Shelofsky with wire fraud and money laundering. On August 26, 2021, he pleaded guilty.
A restitution hearing is scheduled for January 7, 2022 before U.S. District Court Judge Michael H. Simon.
Acting U.S. Attorney Asphaug, Special Agent in Charge Ramsey, and Special Agent in Charge Kressin made the announcement.
This case was investigated by the FBI and IRS Criminal Investigation. Assistant U.S. Attorney Claire M. Fay prosecuted the case. Assistant U.S. Attorney Katie DeVilliers served as forfeiture counsel.