Real Estate Transfer Turned Fraud Becomes 3 Years in Prison for Connecticut Man

When it comes to the transfer of real estate, there are quite a few very specific laws and regulations, and as one Connecticut man recently found out, the punishments for violating those laws can be severe.

According to sources, Daniel E. Carpenter, 59 year old resident of Simsbury, Connecticut, was recently sentenced to 3 years in prison, and then 3 years of supervised release, as well as a $100,000 fine. The sentence, passed down by U.S. District Court Judge George A. O’Toole, punctuated the end of Carpenter’s 6 year ordeal, in which he was convicted of 19 separate counts of mail and wire fraud.

The convictions reportedly came about after authorities figured out that Carpenter had been involved in illegally handling money for clients, and using their money for illegal purposes while the clients believed they were in tax-deferred real estate exchanges from the months of August through December 2000.

The federal tax code that Carpenter was allegedly violating states that investment property sellers are allowed to defer taxation on capital gains, if they purchase a similar property within 6 months, and do not take possession of the proceeds in the meantime. Carpenter’s company, Benistar, acted as a conduit for these transactions, holding the sale money according to escrow agreements until a replacement property could be purchased.

What investigators found was really happening behind closed doors at Benistar, however, is that Carpenter was taking the clients’ money and investing it in high-risk stocks, trying to earn himself and his company large profits and paying the clients the small returns promised in his original agreements with them.

Unfortunately, as often happens when one gambles, Carpenter lost over $9 million of the clients’ money, and was unable to pay them the amounts they were owed. Clients noticed that their money was not there, and the authorities were knocking on Carpenter’s door not long after.

Source: http://connecticut.realestaterama.com/2014/03/04/connecticut-man-sentenced-in-connection-with-tax-free-property-exchange-business-ID0759.html

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