Disbarred attorney, arrested in Decatur, sentenced for role in Ponzi schemePhoto by Dan Whisenhunt
A man arrested in Decatur last year who was accused of fraud in Alabama has been sentenced for his role in a Ponzi scheme, the U.S. Attorney’s Office announced.
According to the U.S. Attorney’s Office for the Northern District of Georgia, Hendrickx H. Toussaint, a disbarred attorney, was part of a real-estate investment fraud that bilked foreign and out-of-state investors out of more than $5 million.
Decatur Police arrested Toussaint in July 2014. He was charged with violating the Alabama Securities Act by defrauding investors in a “managed gold buy-sell program.” Police stopped him for failing to obey a traffic control device at Church Street and East Ponce de Leon Avenue, and discovered the outstanding warrant from Alabama. The officer found “suspected marijuana” in Toussaint’s pants pocket and was charged with possession of marijuana less than one ounce.
According to the U.S. Attorney’s Office, Toussaint was an accomplice to Charles Wooden, who pretended to be a real estate broker “who could locate and oversee the purchase of residential properties and apartment buildings for or on behalf of real estate investors.”
[adsanity id=27331 align=aligncenter /]
“Wooden purported to find properties that could be flipped in a short period for a profit, and also properties that he would manage for the investors,” a press release from the U.S. Attorney’s Office says.
Wooden claimed he would rent properties to tenants, collect rent and pay it back to the investors. He said Toussaint, a practicing attorney at the time, would hold the investor money in escrow and close the purchases for the investors.
“Between 2009 and 2012, multiple out-of-state and foreign investors invested over $5 million with Wooden and Toussaint for the purchase of Atlanta, Georgia, area real estate,” the press release says. “Although Wooden purchased some properties for investors, Wooden and Toussaint did not use the vast majority of investors’ funds as they had promised and represented to the investors. In addition to funding his personal lifestyle and business, Wooden used funds from investors to pay ‘profits’ from short-term real estate ‘flips,’ that in fact never occurred, and to pay rental income to investors from properties that in fact had not been purchased. When one out-of-state investor sued Wooden, he used funds obtained from another victim to settle the out-of-state investor’s lawsuit.”
Wooden and Toussaint provided phony documents to investors who asked about their money, including HUD-1 settlement statements, fake deeds, and even a phony bank account statement to show money was still in escrow.
“Over time, investors asked more and more questions about why public records did not reflect that they owned properties that they had been told had been purchased for them,” the press release says. “Wooden blamed Toussaint and county recording systems, and attempted to deceive the victims further by introducing fictitious people and identities who he claimed would fix what he said were simply title recording problems.”
Wooden, 48, of Stone Mountain, was sentenced to seven years in prison, followed by three years of supervised release, and ordered to pay restitution of $2.4 million.
Toussaint, 44, of Decatur, Ga. (earlier reports had him living in Atlanta), was sentenced to three years, 10 months in prison, followed by three years of supervised release, and ordered to pay $1.2 million in restitution.