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12 Years in Prison for Defrauding Germans on US Real Estate Investments

Judge William Dimitrouleas.

Judge William Dimitrouleas. Photo: J. Albert Diaz/ALM

A former Fort Lauderdale property manager was sentenced to more than 12 years in federal prison in a real estate fraud that fleeced German investors who hired him to oversee their U.S. properties.

Dale Scott Wood, 46, pleaded guilty to wire fraud conspiracy after he was charged last July.

U.S. Judge William Dimitrouleas in Fort Lauderdale imposed a 151-month prison term Monday and ordered him to pay $7.13 million in restitution. The dollar amount equals the amount lost by two limited partnerships in the fraud, prosecutors charged.

Before the real estate crash in 2007, German investors formed the partnerships to invest in commercial real estate mortgages across the U.S. In total, 1,872 Germans put in $56.5 million through HPC US Fund 1 LP and HPC US Fund 2 LP.

As the crash played out, the investor funds foreclosed on many of the mortgages and took title to the properties. They hired Wood to oversee the foreclosure process and manage, maintain and market the properties from November 2009 to November 2013.

But Wood and bookkeeper Theodore Gunter Gies started secretly selling the properties and diverting some of the proceeds to their personal use, prosecutors charged. At the same time, they emailed falsified records to investors to make it appear the partnerships still held title to the properties, according to the charging document.

Wood was held Wednesday at the Broward sheriff's jail in Pompano Beach and was not available for comment. He was charged by criminal information, which normally indicates a guilty plea would follow. Wood signed a factual proffer with his plea agreement that detailed the fraud.

In March, his defense attorney asked the court not to impose the maximum sentence. Wood regrets what he did, admits his criminal actions and acknowledges the severity of the fraud, attorney Magda Janicki wrote in a response to a presentence investigation report and sentencing memo.

"He does not dispute the obvious, that this offense involves a significant amount of money," wrote Janicki, a founding member of the JAM Law Group in Fort Lauderdale. She emphasized it was Wood's first criminal charge, he cooperated with the investigation after his arrest and he hasn't tried to blame anyone else.

"It is clear that Mr. Wood is not a hardened criminal with a record of deviant acts. In fact, Mr. Wood has been a productive member his entire life until he made the mistakes he made with this event. The public is not in the way of harm because of Mr. Wood's actions," Janicki wrote.

She didn't respond to a request for comment by deadline.

Likely as a result of Wood's guilty plea, plea agreement and acceptance of responsibility, his sentence isn't as hefty as it could have been. The conspiracy count carries a maximum 20-year sentence.

The proffer detailed the inner workings of the fraud using a Tacoma, Washington, equestrian center as an example. Wood sold a stake in the Trailgate property for $425,474 and then the money was wired in two transactions to an account Wood used to manage the investors' real estate. The bookkeeper wrote three checks totaling $20,570 and split the money between them. More than a year later, Wood told the Germans they still owned Trailgate.

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