Industry News

Real estate loan fund scam lands exec in prison

Judge orders former PinnFund president to pay $187 million

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Keith G. Grubba, former president of PinnFund, USA, was sentenced Monday in U.S. District Court in San Diego to 63 months in prison, followed by five years of supervised release, for his role in a mortgage business that masked one of the largest Ponzi schemes in San Diego County history. U.S. District Judge Marilyn L. Huff ordered Grubba to pay $187 million in restitution. In January 2003, Grubba pled guilty to one count of conspiracy to commit wire fraud, one count of conspiracy to commit money laundering, three counts of tax evasion, and one count of filing a false statement with the Department of Housing and Urban Development. He also agreed to cooperate with authorities in the investigation and prosecution of other co-conspirators. In total, Grubba and co-conspirators fraudulently obtained more than $330 million in investor funds, rendering it one of the largest fraud schemes in the history of the Southern District of California, according to a U.S. Attorney's office. Forme...