Brothers get prison for $18 Million Ponzi scheme

MASON, Mich (WLNS) – Twin brothers James and Thomas Mulholland have been sentenced to up to 20 years in prison for a Ponzi scheme they were convicted of running.

District Court Judge William Collette sentenced the two to 10 – 20 years in prison on eight felony counts.

• One count of Criminal Enterprises – Conducting, 10-20 years in prison
• One count of Conspiracy to Commit Criminal Enterprise – Conducting, 10-20 years in prison;
• One count of False Pretenses -$20,000 Or More But Less Than $50,000, 100 months -15 years in prison;
• One count of False Pretenses – $1,000 Or More But Less Than $20,000, 3-5 year sin prison;
• One count of Blue Sky Laws- Fraudulent Schemes/ Statements, 6-10 years;
• One count of Securities Fraud, 6-10 years;
• One count of Blue Sky Laws Offer/Sell Unregistered Securities, 6-10 years; and,
• One count for Violation of the Securities Act, 6-10 years.

“These two men abused the trust they were given for their own personal gain and today’s sentence is long overdue,” said Schuette. “The sentences today will not repay the life savings they stole, but it will stop these brothers from ever doing this again.”

The brothers started their business, Mulholland Financial in 1987.

They grew their business by purchasing real estate, to be used primarily as rental properties in college towns.

At one point the brothers managed $22 million worth of property.

In 2008 the recession hit the brothers hard and their highly-leveraged properties caused financial stress.

According to Michigan Attorney General Bill Schuette beginning in 2009 and until they filed for bankruptcy in 2010 the Mulhollands raised almost $2 million from investors.

They promised a 7 percent return based on non-existent real estate profits. They also guaranteed the investor’s principal and interest. A total of 250 investors lost $18.3 million.

In 2010 there were multiple investigations into the investments that the brothers were promoting.

In 2016 the Attorney General’s office picked up the investigation which led to the convictions in July.

The brothers have been ordered to pay $208,000 in restitution.

As part of the 2010 bankruptcy all the victims received some of their money back.

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