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Man pleads guilty to real estate fraud

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The Federal Bureau of Investigation, Philadelphia Division, declared yesterday, Andrew Brosnac, age 48, of Mansfield, Texas. Brosnac, a real estate broker and investment consultant, had agreed to plead guilty to conspiracy to commit bank fraud and wire fraud in connection with the sale and leaseback of businesses in Pennsylvania, New York, West Virginia, North Carolina, South Carolina, Alabama, South Dakota, California, Oregon, and Wyoming.

In pleading guilty, Brosnac admitted arranging funding from banks and credit unions for investors to buy the properties and then used other companies held by him and Pearson to lease and operate the properties for investors. Brosnac also admitted that he and Pearson provided investors and lenders with false and fraudulent financial information concerning the investment properties which induced loans and investments totaling about $19 million. In the plea agreement, Brosnac agreed that he received approximately $2.4 million in commissions and consulting fees from the sales of the properties.

United States Attorney Peter Smith said that between 2006 and 2008 Brosnac and his partner Samuel Pearson, age 47, Hanover, York County, Pennsylvania, had acknowledged using a group of companies to buy Jiffy Lube stores, automotive businesses, convenience store which were also gas stations, and other commercial properties, then trading them to investors in Pennsylvania and California. The investment properties included a Jiffy Lube store in Sayre, Bradford County, Pennsylvania.

Judge Yvette Kane sentenced Brosnac to five years in prison, then he will serve three years of supervised release, and a special assessment of $100, and she then ordered Brosnac to pay to victim investors and lenders restitution totaling $2,409,924.04 representing the missions and consulting fees that he had as a result of the offense.

Pearson, operator of Peanut Oil, was also charged but separately with the crimes conspiracy to commit bank and wire fraud in a criminal information filed in March 2011 and pled guilty in April 2011 pursuant to a plea agreement. He is awaiting sentencing before Senior U.S. District Court Judge William C. Caldwell.

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