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Business loan broker jailed 18 years in small-business fraud scheme

Remington Financial partner Michael McManus faces sentencing next

Andrew Bogdanoff, the ex-Philadelphian who headed small-business loan broker Remington Financial Group, was sentenced to 18 years and four months in federal prison Thursday for ripping off nearly 2,000 business owners across the U.S. of "$26 million they had put forward hoping to land development loans for projects ranging from riverfront apartments in Camden" to Pacific resorts, during 2005-11, writes Jeremy Roebuck in the Philadelphia Inquirer here. Bogdanoff paid himself up to $1 million a year from customers' fees and used it to support a luxurious lifestyle -- without trying to help his clients get promised loans, according to the charges for which he was convicted.

"Greed and arrogance took over my life," Bogdanoff told U.S. District Judge William H. Yohn, in Roebuck's account. "I've lost everything I had - everything I worked my whole life to obtain."

From Roebuck's story: "Promising to line up financing, Bogdanoff and Remington collected up-front fees of more than $10,000. Once the money had been paid, prosecutors said, the company had no intention of finding backers and intentionally found faults with the proposed developments to justify their failure to find funding.

"In court Thursday, Assistant U.S. Attorney David L. Axelrod described Bogdanoff's firm as just one of a growing number of financiers targeting middle-class investors in the loosely regulated market. Unlike large corporations that can rely on federally regulated banks for funding, Remington's clients were 'by and large dreamers whom Bogdanoff and his coconspirators preyed upon for their own benefit,' Axelrod said...'Google 'project funding' and you get a lot of companies that look a lot like Remington. Remington isn't the first to steal money like this, and it won't be the last.'...Even after his arrest in 2012, he aligned himself with a new firm based in Australia and continued to defraud new marks under a pseudonym, prosecutors said.

"In addition to his sentence Thursday, Bogdanoff was ordered to pay $26.5 million in restitution to his former clients and nearly $1 million more in back taxes - even as Yohn, the judge, acknowledged it was unlikely he would ever be able to pay." Ingrid Robinson, 65, a developer and Remington victim from San Anselmo, Calif., who pestered prosecutors and reporters across the country until Philadelphia's U.S. Attorney's Office agreed to take the case, pronounced herself delighted on seeing Bogdanoff brought to justice.

Bogdanoff's fellow Remington manager Matthew E. McManus is scheduled to be sentenced later this year. More Bogdanoff here, McManus here.