Former county resident sentenced in investment scheme
By Alexandra Bogdanovic
Scott E. Luellen, 35, a former resident of The Plains, has been sentenced to seven years in federal prison for orchestrating a real estate investment scheme in Virginia and Delaware.
U.S. District Judge Liam O'Grady rendered the sentence in federal court in Alexandria on Aug. 29.
Luellen pled guilty to one count of money laundering on May 13.
Luellen is the former managing director of Ideal Ventures, LLC and Virginia Heritage Foundation II. Between the fall of 2004 and late autumn 2007, Luellen convinced approximately 20 potential investors, including a private equity firm, to invest millions of dollars in fraudulent real estate projects.
Court documents show Luellen sent “fraudulent e-mails' and faxes from his office in Middleburg to potential investors during the time in question.
Prosecutors said Luellen's conduct was “in all respects intentional, knowing and deliberate, reflecting an intention to violate the law and to defraud investors and was not a product of oversight, misunderstanding or other innocent reason.”
The amount of money individual investors lost ranged from $15,000 to $200,000, according to court documents.
“The investors paid Luellen with funds on the expectation that he use those funds to legitimately advance the development projects,” federal prosecutors maintained. “Luellen used a small fraction of the investment funds to hire various consulting firms and contractors, ostensibly to advance the development of the projects, but really to sustain the scheme by creating the impression that he was using the investors' funds as expected.”
He ultimately received approximately $1.7 million from investors and used the money to finance a “lavish lifestyle.” As part of that lifestyle, prosecutors said, Luellen lived at the Ritz Carlton in Georgetown.
When he gets out of prison, Luellen will be on supervised release for three years, subject to several conditions, including participation in mental health counseling. He must also make full restitution in monthly payments of $500.
E-mail the reporter: abogdanovic@timespapers.com