Authorities in California’s Contra Costa County are looking for an 83-year-old man suspected of running a real estate scam in which more than 100 investors lost large sums of money.
Police believe John Banker, whose whereabouts remain unknown, was involved in fraudulent land deals worth at least $2.5 million. Some estimates put the number as high as $9 million, said Greg Leonard, a detective with the Walnut Creek Police Department.
“We believe that there’s some type of fraud involved, but we don’t know exactly what has transpired,” Leonard said.
So far, the police know it is a “complex investigation,” and one that likely involves between 120 and 150 different groups of investors. Since 1997, Banker, and his partner, Conrad Colbrandt, allegedly told investors that they could buy land from PepsiCo, Deputy District Attorney Steven Bolen said.
The investors were told PepsiCo was trying to raise cash by selling off the land their fast-food businesses sat on, Bolen said. Investors believed PepsiCo would then lease back the land, and pay royalties. Investors also allegedly were presented with copies of leases and contracts, Bolen said.
“They were all just made up,” he said.
PepsiCo said it had nothing to do with the deal. The company sold off all its fast-food restaurants around 1997, Bolen said.
The investors, however, weren’t aware of that. In fact, some were led to believe they could double their money, Bolen said. It’s not clear yet if certain types of investors were targeted, but authorities know some family members and friends bought into the deal. Investors are still coming forward, Bolen said, and investigators are still trying to determine the full scope, range and details of the investment deal.
Colbrandt has been in touch with investigators and is cooperating with them, Leonard said. Colbrandt and his attorney, Richard Madsen, did not return calls seeking comment, but Madsen previously said that Colbrandt was a victim like the others. Banker led him to believe the deal was legitimate, according to previous statements.
Colbrandt is president of Tracol Limited, a mortgage brokerage. His license with the California Department of Real Estate is current and in good standing. Banker, however, had his license revoked in 1980 and suspended indefinitely, according to the Department of Real Estate’s Web site.
The possible fraud first came to authorities’ attention when Colbrandt contacted investors to let them know the plan they’d invested in had disappeared, Bolen said.
Colbrandt also contacted St. Mary’s College to let officials there know he would not be able to come through with a series of pledges worth $112 million that he’d made to the private college in Moraga, Calif. The college had planned to use the money primarily to build a new science building, as well as help pay for other construction, said spokeswoman Debra Holtz.
Colbrandt, a St. Mary’s regent since 2000, apparently relied on profit from the investment deals to fund the pledges. The college was shocked and disappointed, and contacted the district attorney’s office, Holtz said.
“From our side, we immediately put together a special committee of three college trustees to oversee a full-scale inquiry into the situation,” Holtz said.
The trustees will be looking into what happened, as well as how the lack of money affects the college’s capital budget. It won’t affect its operating or endowment budgets, she said.
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