A former Alexandria man has admitted that he bilked investors out $1.5 million in a years-long Ponzi scheme, then fled to Costa Rica on a yacht purchased with investors’ funds. Richard Pettibone, 44, pleaded guilty to mail fraud in federal court in Alexandria and was sentenced to three years behind bars.
Pettibone operated Benten Investors, which was based in Alexandria and the District and purported to be a real-estate lending company, from 2002 to 2006. But instead of making profits for his investors, Pettibone received millions of dollars based on lies he told investors about the business, and used some of the funds for himself, according to court documents.
Pettibone “solicited funds from investors through false, fraudulent and misleading representations” about how the funds would be used, the risks associated with the investment and the amount of returns expected, his plea agreement says.
Investors lost about $1.5 million in the scheme, according to prosecutors. Court documents don’t say how many people were duped in the scheme.
Pettibone’s plea agreement says that he sent investors letters in an effort to “lull” them into “a false sense of the company’s profitability” and also sent them fake monthly account statements and Internal Revenue Service documents.
In one letter, Pettibone wrote, “This year is shaping up to be our best year ever!” and “If you have been considering adding to your investment […] now is a great time,” according to court records.
Pettibone got investors by telling them his investments were safer than the stock market because he could guarantee returns, court records say.
Documents say he used investors’ funds to help pay for a $400,000 yacht that he purchased in the name of his girlfriend’s mother. Then, between July and November 2005, he wired a total of $530,000 to a bank account in Costa Rica. Pettibone and his girlfriend then fled on the yacht to Costa Rica, where they opened a hotel in mid-2006, court documents say.
Pettibone had also used investment funds to pay credit card bills and purchase real estate.
A warrant was issued for his arrest in October 2009, court records show. Pettibone was apprehended in Costa Rica, where he spent 11 months in custody during extradition proceedings. His first appearance in a U.S. court was in November.
