SALT LAKE CITY — A man who masterminded a financial fraud scheme that took people and lending institutions for more than $12 million received a stiff prison term Tuesday.
U.S. District Judge Ted Stewart sentenced Christopher D. Hales, 30, to 90 months in a federal prison followed by 60 months of probation. He must also enter a drug and alcohol treatment program while incarcerated.
The Midvale man earlier admitted to one count of bank fraud. He initially faced 10 counts of mail, wire and bank fraud and money laundering. Prosecutors agreed to drop nine counts in exchange for the guilty plea.
"The motivation for Mr. Hales' actions appears to be simply greed," Stewart said.
Hales admitted that he enlisted others in 2005 to file an appraisal falsely valuing a Salt Lake house at $750,000. He arranged to buy the home, lying on the loan application that he made $15,000 a month. He then recruited a straw buyer to purchase the house from him for $1 million, netting a $172,650 profit for himself.
In all, Hales' defrauded multiple victims and banks of $12.7 million, which Stewart ordered him to pay back as part of his sentence.
Hales used the money to live a lavish lifestyle, including throwing $100,000 parties in Las Vegas.
Hales had no source of legal income and hadn't had a "legitimate" job since 2006, according to court documents. Prosecutors say a search of his home turned up more than $28,000 in cash hidden in flower pots. He drove a vehicle registered to Cedar Hills Mayor Eric Richardson to avoid the ignition interlock device placed in his own car as a result of a DUI conviction, court documents show.
Richardson was mentioned in court documents as being associated with Hales, but he was not charged with any crimes. Court records allege Hales was involved in various scams including:
• Securities fraud in which a victim was persuaded to invest $300,000 in a non-existent $25 million CD.
• A scheme in which two investors put $244,000 into computer servers purported to predict stock market fluctuations.
• A car loan scheme in which high-end automobiles were bought at inflated prices so that they could skim excess loan proceeds.
• An effort to scam Bosnian immigrants who spoke little English out of their home.
At Tuesday's hearing, Hales told the judge his actions were "selfish, greedy, horrible, cruel, hard-hearted, distasteful, despicable."
"There's no human excuse for the hurt and the harm that I have caused," he said.1 comment on this story
Getting caught, Hales said, was the "best thing and the worst thing that ever happened to me." He said he needed to be humbled and he has learned that family is the most valuable part of his life. He apologized to his parents, siblings, best friend, daughter and victims.
"I can tell you that I do realize the pain I have caused because it breaks my heart every day," he said.
Hales vowed to sober up and pay back the money he stole.